The Inflation Targeting Feasibility Study In Our Country

The traditional intermediate goal of monetary policy is to choose between interest rates and money supply.But the developing unceasingly financial innovation, the financial liberalization tendency at the end of 70's of the 20th century change the relatedness, the available and the measurable of intermediary target of the tradition monetary policy, this causes the various countries' Monetary Beau to seek in abundance other economical variables suited to national condition of their country. Therefore, at 1990s ,the practice of the monetary policy began to appear the multiple characteristics- more and more countries declare to renounce the intermediary target of money supply, interest rate etc, carry out the frame of the monetary policy of the name of"inflation targeting institution".The country which used the inflation targeting, under the operation way of monetary policy in formerly nailed the money supply and the nominal exchange rate, mostly has experienced the high inflation rate and the unstable domestic economy. The defeat of the operation way of the tradition monetary policy causes these countries to carry out the inflation targeting. The practice proved that, the inflation targeting policy in the aspects of stabilizing price, promoting stable growth of economy, the results are obvious. Due to the good performance of the national economy inflation-targeting system makes the operation of monetary policy gradually become academic,the political circle pays attention.This article through to the inflation targeting introduction, and has made the analysis one by one to the interest rate and the money supply as the monetary policy intermediary target theory, the effects of money supply as the intermediate target become weaker because of hardly controlled Monetary Base and Unstable, Money Multipliers, Income Velocity of Money lowing down and the transmission mechanism' s block, etc.; The interest rate can't be the intermediate target for their unripe time. In view of this, we must take the inflation targeting as our country's monetary policy intermediary target, not only for the public to understand and to form stably reasonable anticipated, enhances the validity of the monetary policy, moreover the Monetary Beau may retain in the tool utilization the flexibility, thus realizes the economical growth effectively.