The Study On The Effectiveness Of Monetary Policy In China

There is great divergence about the effectiveness of monetary policy in the western economic theory of main schools. And accordant theory about it has not been founded in lots of positive analysis. In practice, the effectiveness of monetary policy has different effect in different countries and even in different periods of one country because of different economic backgrounds and different choices of policies and strengths of implement. This paper draws lessons from the thinking of domestic and foreign research, casting aside a complicated theories study, to analyze the effectiveness of monetary policy in China since 1984, and put forward homologous suggestions for the factors which influence Chinese monetary policy effectiveness.Besides the introduction and the conclusion, this paper is divided into four chapters altogether:Chapter1 is the summary on theories of monetary policy effectiveness. The analysis of this part mainly includes:(1)Essential economic school of thought, such as Keynesian and Monetarist and the school of logos anticipation etc.; (2)Make a research of conduction mechanism of various monetary policy; (3)Conduct the research on Monetary policy target, monetary policy tool, monetary policy rule etc.Chapter 2 is the analysis of the implement of monetary policy in China. This part analyzes that China how to establish and implement monetary policy since 1984. This part is also divided into three stages: 1984-1992 is a first stage; 1993-1996 is a second stage; the time since 1997 is the third stage. From these stduies,this paper tries to find out the reasons about good or bad implement of monetary policy in different periods.Chapter 3 analyzes the factors that influence the monetary policy effectiveness in China. Based on chapter 1and chapter 2, this part completely sums up the factors which influence monetary policy effectiveness, and points out these factors which can be divided into two sides: one is the general factors of the monetary policy namely theories factors, such as time lag of monetary policy, individual's rational expectations, velocity of circulation of money. The other is some special factors that influence the monetary policy, such as changes of financial system, imperfect social credit system and the difference of economic development in China. Chapter 4 puts forward to suggestions for building up the effectiveness of monetary policy in China. Based on analyzing of theory and actual sides, this paper puts forward corresponding suggestions which restrict the effectiveness of monetary policy in China. So, two aspects can be done for improving the effectiveness of monetary policy. One is the position of the monetary policy itself, such as what can be done or not, and what is the adjusted monetary policy mode actually. The other is the social economic environment which improves movement of monetary policy.