The Study On Transmission Mechanism Validity Of Chinese Monetary Policy In Recent Ten Years

The effectiveness of monetary policy means that monetary policy can achieve its objectives about economic regulation and control. It depends on the transmission mechanism of monetary policy , which is the process from the use of monetary policy tools to realization of policy objectives.The transmission mechanism of monetary policy is described as a function of variables, including financial environment, objectives, rules, tools, transmission channels, external impact factors of monetary policy and so on. The monetary policy is the vital approach to macroeconomic control.Through establishing a sound monetary transmission mechanism, we can ultimately improve the effectiveness of monetary policy.Research on the effectiveness of monetary policy can be divided into two aspects about theory and practice: (1) On theory, does monetary policy take into effect on the real economy? That means, whether or not changes of money supply can lead to real changes of economic variables (such as the actual output). (2) In practice, how to choose and imply appropriate monetary policy in order to achieve macro-economic objectives for the central bank?That means how to determine the ultimate and intermediary objectives, to select the appropriate monetary policy tools to improve the transmission mechanism which can achieve macro-control. To systematically study the effectiveness of monetary policy, it is necessary to seriously answer above two questions . In this paper, the research can answer them. First of all, on theorey the author analyzes the effectiveness of monetary policy, then gets an easy result.; then in practice he proves the result by empirical study, and gives some suggestion on how to enhance the effectiveness of Chinese monetary policy.Absorbing and benefiting from the basis of the former achievements, this paper uses such a method which combining the normative research and empirical study together. The main research work is to combine the theory of monetary policy with the Chinese practice. Under the guidance of mature theory, the author can carry the deep research on the effectiveness of monetary policy in the transition period for China's economic situation, utilize the existing foreign Theoretical and practical research result, point out China's future monetary policy and put forward the countermeasure and proposals on this basis. This is done through the integration of qualitative analysis and quantitative analysis methods...