The Research On The Monetary Policy Transmission Mechanism Of The Stock Market In China

Stock market as an important aspect of the market economic system of our country, with the maturing of the system and the growing of the scale, has a more and more important position in our national economy. The traditional transmission mechanism of monetary policy is under challenge. The stock market has become an important channel in the transmission mechanism of monetary policy so that our monetary authority has to consider its important when sets down the monetary policy. In the reform process of turning our monetary policy under the indirect controlling and regulating, the establishment of policy market which is adapted to the development of the stock market has a great practical significance.In this paper, the stock market is placed in the entire monetary policy transmission, then a general description is given. From the study of the stock market within the three selection criteria of the intermediate target, it is not feasible that the stock market is regard as a sole intermediate target at the present time. However, in order to achieve the ultimate goal of the well-established monetary policy, our central bank takes the stock market as a concerning target and controls and regulates it with the use of selective policy instruments. The econometric part of this paper demonstrates the internal and the external mechanism of the transmission mechanism, giving the previous theoretical analysis a date support. Finally, the relevant policy recommendations about how to make the transmission mechanism of the monetary policy more effectively are given.