Analysis Of The Effectiveness Of The Money Supply As The Intermediate Target Of Monetary Policy In China

Monetary policy is an important means for National macroeconomic regulation and control. The effectiveness of monetary policy is closely related to the operation and development of a country's economy. With the establishment and improvement of China's socialist market economy, Monetary Policy play an increasingly important role in China's economic development, Effectiveness of monetary policy depends on the selection of intermediate target of monetary policy is valid. Central Bank of China as the money supply intermediate target of monetary policy officially since 1996, supported by the size of credit. M1 money supply and the level of output and price levels are closely related, Therefore, the central bank temporarily M1 as the intermediate target of monetary policy, MO and M2 as the observation target. However, Money supply as the intermediate target of monetary policy implementation in specific often show inefficiency due to various factors, so can not achieve the intended policy objectives. So in theory to study the validity of the money supply as the intermediate target of monetary policy to real increase of the effectiveness of monetary policy implementation is important.This article is based on the discussion of the issues, selected from 1999 to 2009 the money supply, GDP and the consumer price index quarterly data, using the method of combining theoretical analysis and empirical analysis, based on the selection criteria of intermediate target of monetary policy, From the measurability, controllability and related systems three aspects discussed of effectiveness for money supply as intermediate target of monetary policy. Analysis to find the reasons for the money supply as intermediate target of monetary policy of the low effectiveness.and puts forward policy recommendations for improvement.Full-text consists of a total of five parts, The first part discusses the significance of the topic of this article, the money supply as the intermediate target of monetary policy at home and abroad on a Research, and the research methods and research thoughts adopted in this paper etc. The second part defining the concept which related to the objectives of monetary policy, And the theories of the four Western mainstream school of economics on the money supply as the intermediate target of monetary policy. And Germany, Switzerland, the money supply as the intermediate target of monetary policy success stories. The third part describes the money supply as the intermediate target of monetary policy in the process of determining, this is mainly experienced three stages. The fourth part from the perspective of the empirical analysis of money supply as an intermediate target of monetary policy effectiveness, using of ADF stationarity test, Granger causality test, VAR model and impulse response functions, and many other econometric techniques from scalability, relevance and analysis of three aspects of controllability. Part V found for the analysis of money supply targets shortcomings, make relevant policy recommendations.