The Study On The Relationship Of The Asset Prices And The Monetary Policy

The relationship between the asset prices and the monetary policies is also the hot issue in the theoretical field.The financial asset prices play a more important role in the formulation of the monetary policies.With the development of China's financial market,the asset prices' fluctuation is substantial and becomes more frequently.As a result,the macro-economy is affected and the monetary policies are challenged.This thesis studies the relationship between the monetary policies and the asset prices theoretically and empirically.Chapter one introduces the related theories of the monetary policies and analyzes the impacts of the asset prices' fluctuation to the monetary system.Then chapter two illustrates The Theory and Practice of the Monetary Policy's Intervention to the Asset Prices' Fluctuation.It also discusses the feasibility of bringing the asset prices into the related inflation index,which is the foundation for the monetary policies to react to the fluctuation of the asset prices. Chapter three gives an introduction to the effects of the monetary policies to the asset prices.It focuses on the analysis of the possibility that the monetary policies can cause the asset price bubbles.The last part,chapter four,applies the VAR model,the representative variables and the data of our country to empirically test the relationship between the monetary policies and the asset prices.The empirical tests include the Granger Causality test,Impulse Response Function and the Variance Decompositon. Finally,the chapter five summarizes the above contents and gives the relevant policy suggestions.The main conclusion of the thesis is that there is Granger causality between the monetary policy's intermediate targets which mean the money supply and the interest rate,the monetary policy's ultimate targets which include the CPI and the GDP gap, and the asset prices.That means the monetary policies react to the fluctuation of the asset prices or the asset prices have an impact on the formulation of the monetary policies;meanwhile,the monetary policies regulate the asset market,thus impacting the monetary policy's ultimate targets and regulating the national economy.This provides the theoretical basis for the central bank to intervene the asset prices.