The Regional Differences Of Monetary Policy Effects In China

Monetary policy refers to policies adopted by a country's central bank in order to achieve specific economic goals. The central bank takes advantage of interest rates and other monetary policy tools to adjust the national economy. As the monetary policy is a concept concerning aggregate control, the monetary authorities tended to focus on the operation of the entire financial system, ignoring the operation of regional financial system. In the aspect of the monetary policy transmission effects, the monetary authority pays too much attention to the study of the level of Macro economy, without thinking about the regional differences of the monetary policy transmission effects in the level of the micro economy. However, the European Union, the United States, Canada, and other developed Western countries have studied the regional differences of the monetary policy effects successfully. There is a consensus that the regional differences of monetary policy effects lie in the regional economic and financial development gaps and the structure differences. The problem of regional differences of monetary policy effects are also exists in China such a large country. What's more, the economic and financial difference between the eastern, central and western region are beyond our imagination.Based on the theory of optimum currency areas and the monetary policy transmission mechanism theory, the author of this paper analyzed the regional differences of monetary policy effects from three aspects, including the single currency asymmetric shocks of the monetary policy, the body of monetary policy transmission as well as the monetary policy transmission channels. Then, he analyzed reasons of regional differences of the monetary policy effects from the perspective of the regional differences of the financial, the industrial structure, enterprise structure and residents preference structure. Finally, he got the overall conclusion: China's monetary policy is most effective in the eastern region; the effect in the central region is less effective; however, the monetary policy has less influence on the western region. At last, he gave some suggestions which will play a role in solving the problem from the aspects of system obstacles and regional difference of monetary policy.