An Empirical Test And Its A Applicability Of Taylor Rule In China

By the beginning of the 1990's, the credibility of monetary policy has been widely recognized. At the same time, the monetary policy has become more and more regularly. Currently, China has adopted the discretionary monetary policy, the advantage of this monetary policy is so evident that it can adjust flexibly according to the recent economic situation, but since price and wage was rigidity as well as the transmission of monetary policy was out of tune, all of these will cause the instability of economy. According to the development of China's economic and financial system, rule-based monetary policy will become the best choices of China's monetary policy. The Taylor Rule was summed up by Stanford economist John Taylor U.S. The famous rule was based on the experience of United States, which has a successful practice in Western countries for decades. China can learn from the experience of Western developed countries, searching for our country's form from The Taylor Rule, in order to control our economy.In this dissertation, the first part was introduction, after reviewing the traditional Taylor Rule briefly; the author introduced the development of Taylor Rule as well as its policy implications. Then, the second part was comments, mainly for the applicability of The Taylor Rules in China. The third part of this dissertation was the positive research of The Taylor Rule in China. Then, the last part is the improvements of The Taylor Rule when it adopted in China's practice.The innovation of this dissertation can be concluded in two part, firstly, after summarizing the various analysis of The Taylor Rules at home and abroad, this dissertation expand the applicability of The Taylor Rules in China. Last but not least, based on the research of others, this dissertation modified The Taylor Rule, adopting a new model in positive research according to China' practices. Then, summarizing the problems that may exist in China when apply the Taylor Rule, and put forward corresponding countermeasures.