The Study Of The Regional Effectiveness Of Monetary Policy In China

The research of the regional effectiveness of monetary policy can consummate the monetary policy theory, and enable the monetary policy execution to achieve the biggest achievements.The process of the conduction of the monetary policy takes the development of economics and financial industry as the basis,and the effectiveness of monetary policy are different in the different area. Because of the difference in the financial system and the system of ownership structure, the unified monetary policy which covers the whole country have the different effectiveness inevitably in the different area. Currently, the gross adjustment is the main way in the course of making and carrying out the monetary policy in our country, which is widely used in every part of China. But due to the differences of economic environment, financial developing level, ways of monetary policy transmission and etc in each region, the contradiction between the united monetary policy in the whole country and imbalance of regional economic development would influence the last effectiveness of monetary policy. This requires that when the central bank put monetary policy into practice ,it is going to consider and respect the demand of the regional imbalance of development of economy and the finance to monetary policy sufficiently. This plays a very big role in eliminating the regional imbalance of economic and financial development,and makes monetary policy execution obtain the biggest achievements.This article concludes that monetary policy of our country have regional effectiveness through empirical examines in the basis of analyzing the economical, financial difference and monetary policy conducting mechanism in the eastern part, the middle part and the western part of China. Therefore, monetary policy of our country, should under the identical premise, explores differentiated monetary policy to different regions.The mainpart of this paper includes four parts. The first part analyzes the exsitenc of the regional effectiveness of monetary policy by using the theory of the optimal currency area , and points out the contradiction between the uniting monetary policy and the regional effectiveness of monetary policy. The second part analyzes why our country exists the regional effectiveness of monetary policy. The cause of the regional effectiveness have two aspects.one aspect is the difference of the economical and financial development in the eastern part, the middle part and the western part of China.anothe is the difference of monetary policy conducting mechanicsm. In the third part,we use econometric instruments such as cointegession analysis,make a empirical examines of the regional effectiveness of monetary policy. In the fourth part, we have gived some advice on improving monetary policy-making. we suggested that the central bank shoud pay attention to micro management,and adopt some measures to establish a favorable financial ecological environment.This paper have proved the regional effectiveness of monetary policy sufficiently by using the theory of the optimal currency area and a empirical examines. Some suggestions on regional differentiation of the monetary policy was gived in terms of monetary policy conducting channels and the links of branches clearly.