An Empirical Study Of The Transmission Mechanism Of Monetary Policy In China

On the basis of explaining the effective theory and the transmission mechanism theory of monetary policy, by adopting cointegration test, vector autoregressive model(VAR) and variance decomposition, this paper has conducted an empirical study on the controversy monetary transmission mechanism of China with the data sample from 1984 to 2004. The results show that through both monetary channel and credit channel, the monetary policy can affect the real output. Comparatively, the monetary channel is more effective. The monetary policy of China has influenced the real economy. The short-term monetary non-neutrality also exists in China. There is a long-term equilibrium relationship between the sample data of monetary channel , credit channel and output.