Analysis Of The Transmission Channel Of Monetary Policy In China (1998-2007)

The issue of the monetary policy's transmission mechanism in China has drawn more and more attention recent years.Especially on the condition that the monetary policy does not work remarkably,all circles are anxious to know what is the problem with the transmission mechanism in our country and how to solve the problems.Both are the very subjects this thesis would like to focus on.On the basis of explaining the transmission mechanism theory of monetary policy, this thesis categorizes transmission channel of monetary policy into two classes:Credit channel and monetary channel(Interest rate channel,Capital asset price channel and Foreign exchange rate channel).Experienced method of combining together with quantitative and qualitative analysis was used to conduct an empirical study on the controversial transmission mechanism of monetary policy in China with the data sample from 1998 to 2007 by adapting Cointegration test and Impulse response technique.The results show that:the monetary policy can affect the real output through both monetary channel and credit channel,both of which are independent;comparatively,the credit channel which is main channel is more effective;all of the channels are ineffective actually; monetary policy is transmitted by mufti-channels,in which the interest rate channel is the main channel and the Credit channel is the secondary channel is the developing direction of transmission mechanism of monetary policy in china.According to the study above,this thesis analyzes the defect in the transmission mechanism of monetary policy and puts forward a series of suggestion:a) to improve Credit channel is still the mission nowadays,including strengthening the responsibilities of the central bank and develop the system of commercial bank;b) to promote the monetary channel is the mid and long-term missions,including forming reasonable market roles, improving interest rate marketization,constructing capital market in order to improve the impact of Interest rate channel and Capital asset price channel and bring foreign exchange rate channel into practice.