On The Impact Of The Stock Market Development On Monetary Policy

The financial development enhanced stock market's importance in national economy. The stock price undulation has affected the monetary policy performance environment, then the change has happened through the mechanism which monetary policy influence the macroscopic economical. So it is became an urgent mission to the academic circles and government that what the monetary policy should to do to this change and how to meets the new economical revolution situation need. There is a most important premise is to clarifies the mechanism and the principle which monetary policy influence stock market price undulation. This will be a helpful processes to know the monetary policy and stock market's relations when we understand how clarifies the monetary policy to affect the stock price changes, how implements and formulate monetary policy regarding the new economical situation.Along with the financial liberalization development, some countries in the interest rate, the price and in the domestic entity economy appeared the economical fierce undulation, the source of undulation power are not come from the macroscopic economical direct , but come from the money market, specially stock price large undulation. Under this background, the relationship of stock market and monetary policy become the currency research hot-topic. This article mainly analyze the way that the stock market influence the monetary policy from multi-angles, promulgates inner-mechanism that the stock market to affect the monetary policy, discuss the currency politics coordinates should pay attention to the stock market change, provide some kind of support and reference for monetary policy regulation and the policy-making under the more and more flourishes stock market. This article mainly solve the main question is under the background which the stock market flourish, the central bank whether should pay attention to and intervene the stock market. Solves this question firstly need to clarifies the relationship between stock market and the monetary policy. First chapter is the introductory remarks. Through the content, research background, research goal and significance and research technique elaboration, generalize the paper topic, the research content and the main thought has carried on the whole summary. The monetary policy change the stock market performance is through the monetary policy goal directly way and the entity economy movement indirectly way.Second chapter first has studied the relationship of stock market and the monetary policy ultimate objective. The stock market and the inflation have the close relation, so this requires us must pay more attention to stock index when we judge the macroscopic economical situation. At the same time the performance of stock market has close relationship of exchange-rate, employment and so on. The development of Stock market's function relies on the stock market itself function display in the very great degree; also depend on such as the macroeconomic environment, the economy development phase as well as the economic policy influence.Third chapter discuss the influence that the stock market affects on the monetary policy intermediary goal. The stock market scale expansion caused the currency demand to increase, increased the currency demand function instability. Stock market's development will be able to slow down the money circulation velocity. The stock market affects the currency supplies structure brings the influence and also can bring the influence to the currency supplies total quantity. The research indicated that, our country stock market has influence to the money supply change, but to the different level money supply the influence effect is different. The stock market mainly has the influence through two ways to affects the interest rate: One way through the fluctuation of relative price of each kind of financial tool in the stock market to affects the fund supply and demand thus influent the interest rate; the other way through change the investor's anticipation of economical situation thus affect the interest rate trend. The stock market drop down accuracy and reliability of the currency rule that take the money quantity as the intermediary goal. The research indicated that our stock market already has influence on the monetary policy intermediary goal, although said from the overall, this kind of influence not so intense, but it unceasingly strengthened along with stock market's deepening. Fourth chapter analyzed the correlation influence that monetary policy affects on the development of stock market, the article has continued preceding text, analyzed the reciprocity relationship between monetary and stock market from the monetary policy angle. The interest rate and the money supply are two important intermediary goals and regulative way of central bank's monetary policy. The interest rate through affects the market the fluidity and the company profit ability to affect the stock market's the fluctuation situation. The central bank implements eight times continuously lowers the interest measure from 1999 to 2002, has provided the positive support to stock market's steady development. After 2006, in view of the fact that the market fluidity was too sufficient and faced with the pressure of inflation, the central bank separately implements enhanced the reserve fund rate and the saves and loan interest rate of commercial bank, but stock market actually appeared the counter policy cycle movement characteristic, the article has carried on the related analysis and the research in light of this, we can see that the interest rate just one reason of multitudinous factor that influence the stock market performance.After that we sequentially analyze monetary policy act on stock market from currency supplies quantity. The currency supplies quantity change directly affects stock market by the price fluctuation, the profit trend and people's anticipation about stock movement undulation. We can know that the money supply and the stock market present co relational dependence from the historical data analyzing At the same time, the monetary policy except through the economical variable to bring out chain-reaction with stock market, its indirect influence also is a fact which cannot be neglected. Because stock market's movement is the result of multitudinous individual and organization participation transaction, therefore through changes investor's anticipation about the market situation is one kind of comprehensive measure, we often see that the USA FED frequently through some conversation to advises the investor behavior, reduces the investor blind investment and non-rational behavior, safeguards the entity economy and the financial economy can mutually steadily develop.Fifth chapter through collects the last few year's correlation economical data, has carried on the corresponding real diagnosis examination to the monetary policy and stock market's mutual influence. Firstly we examined the relationship between stock market and the currency demand quantity, through the regression analysis, we can receive the conclusion that between stock market and the currency total demand presents has the co relational dependence, namely it can cause the currency demand corresponding increase when the stock market price rise and the business scale expand. The analysis result demonstrated the stock market price is extremely remarkable to the currency speed in statistics, it showed our country stock market already had the more and more important influence function to the currency speed of flow. Finally the article examine the currency supplies act on stock market effect ion, the analysis result demonstrated again that between the stock price and money supply has the remarkable negative direction correlation dependence. There is obviously relation between stock price index and generalized currency remaining sum M2, with the narrow sense currency remaining sum M1 is inferior and with the cash circulation M0 relativity is lowest.Under the stock market development condition it is a significant theory question about monetary policy regulation, also is a major dispute problem. We thought the monetary policy should pay attention to the stock price undulation for the finance and the economical stable in long-term. In order to reach this goal, the central bank firstly needs to determine the stock price undulates whether correct response the determining factor. As a result of taking wrong stock price, or the collapse of stock price froth will bring serious negative influence to the financial system and the macroscopic economy, therefore it require central bank correct analyze the deep reason in the stock price undulation and take correct measure to make sure the finance and entity economy steady grow. In brief, through to domestic and foreign literature more comprehensive research, we has discussed the stock market from the theory and the real diagnosis aspect, we also research what kind of correct monetary policy regulation should be taken under the background of stock market. We believed the monetary policy faces more and more huge challenge under the keeping flourishes stock market and the central bank should make the corresponding adjustment.