Monetary Policy Effects Of Regional In Open Economy

In this paper, according to the standard optimal currency area, we describe Chinese current policy of adopting the single currency, which would bring about different effects in different regions in the open economy, namely the so-called regional effects of monetary policy.We first learn the effectiveness of monetary policy in China, for the detail analysis of the regional effects of monetary policy in China. We will establish four models under study, respectively, different models for panel data estimation, and we will compare the different conclusions drawn, we find that monetary policy is very important in Chinese economic development, especially in the open economy the conduct of monetary policy will smooth the exchange rate fluctuations, reduce inflationary pressures and promote economic development. Based on this conclusion, we divide the three regions in China, such as the eastern, central and western. In the open economy, according to the empirical study of three regional impact of monetary policy, we find:China monetary policy effect gradually decreases from east to west, but the changes in the short term, when there is the positive impact of monetary policy in the West, it has the largest response in the short term, more than the eastern and central.When we analyze why there is the monetary policy of regional effects, we analyze our monetary policy of regional effects from the vertical angle to macro, meso and micro levels, in order to demonstrate the regional structure of Chinese monetary policy has brought many problems. The macro level, we analyze the credit channel, interest rate channel and exchange rate channel, in meso level, we studied the regional industrial structure and in the micro level, we explore the enterprises distribution in the region.For the Macro-channel, we expect after the eastern credit expansion, it will follow a low growth period, while the western region is experiencing rapid credit expansion phase. In addition, the interest rate channel in the most significant in the eastern region and in the central it is less significant than in the eastern and the interest rate channel is the most difficulties in the western. Finally we found that the western region responding to the impact of the exchange rate is higher in the short-term, while the eastern region is higher than the central.For the Meso-channel analysis, we found that the eastern central and western differences in industrial structure, the eastern region has a higher proportion of tertiary industry, while the momentum of the development of tertiary industry is more fierce in recent years in the western, the central region has the highest proportion of the secondary industry in three regions.For the Micro-channels, we mainly study the regional effects from the company level.At the last, we give four suggestions:enhancing the flowing of the factors, reforming and strengthening the financial institutions, encouraging the integration of regional industry and improving the system of exchange rate. We hope that the regional economic can develop coordinately and it can improve the national economy.