A Study On Inflation Rate Target And The Choice Of China's Intermediate Target Of Monetary Policy

When money supply as the current intermediate target of monetary policy is reducing its effectiveness, it is necessary to learn from international experience, to study China's intermediate target of monetary Policy and to find an intermediate goal that suits the actual conditions of China's monetary policy. It is of great theoretical and practical significance to improve the effectiveness of the monetary policy.This paper first introduces the general theory about the intermediate target of monetary policy and systematically analyzes the introduction and development of the theory of inflation targeting as well as the concrete practice in the different countries, then analyzes the suitability of China's current intermediate goal of monetary policy and the possibility of setting China's inflation rate as the intermediate target of monetary policy. The full paper is divided into five chapters.Chapter I introduces the background and significance of the research and the status quo of study on this subject at home and abroad and the contents and methods of this study.The second chapter outlines the general theory of intermediate target of monetary policy, explaining the meaning, role and the choosing standards of the intermediate target of monetary policy, introducing several kinds of intermediate goals of monetary policy.Chapter III is about the suitability analysis on money supply as current intermediate target of China's monetary policy. Through specific data and empirical analysis, analyze the'three characteristics'-- can be controlled, measured and relevant to the ultimate goal. Thus, it reaches a conclusion that China's money supply is not suitable as the intermediate target of monetary policy. Chapter IV is about the theory and practice of inflation targeting system, analyzing the historical background, the development process and the status quo of it. Then analyze it from the angle of monetary policy theory. Finally, discuss the specific practice of inflation targeting system in different countries, and draw conclusions of inspiration.Chapter V is about the feasibility analysis of the inflation rate as the current intermediate goal of monetary policy. According to the theory of inflation targeting and the necessary economic and financial conditions when inflation rate acts as the intermediate goal of monetary policy, analyze the significance, possible difficulties, and supporting policy recommendations when choosing inflation rate as the intermediate goal of China's monetary policy .