An Empirical Study Of China's Monetary Policy, Asset Prices Transmission Mechanism

From a global perspective,the development of capital market are undergoing profound changes the transmission mechanism of monetary policy, it has become an important transmission channel in parallel with the traditional bank credit channels of monetary policy, the capital market monetary policy transmission mechanism is increasingly cause for concerns. From the 90, 20^th century, with the rapid development of China's capital market, it has played an important role in promoting economic development, optimizing industrial structure and rational allocation of resources. the development of Capital market has led to profound changes in China's financial structure, the implementation of monetary policy environment has greatly changed, it has presented new challenges in the monetary policy transmission mechanism and monetary policy instruments, it must be taken into account for the monetary authority to set monetary policy.The capital market transmission mechanism of monetary policy is to study how the various financial variables of instruments affect the real economy. Domestic and foreign researchers have a fundamental convergence view on the capital market transmission of monetary policy. However, it has different opinions of the capital market monetary policy on the degree of impact reflects the real economy. It is not only because the different development stages of the national capital markets and improve levels, but also for the independence of national monetary authorities on the monetary policy and the differences of economic structures. China is in the stage of the economic development transformation and adjusting the industrial structures of the market economic reform, it is great instability in the financial environment and financial structure, so the study of the monetary policy transmission on the capital market has a great practical significance.If you want to resolve the extent of how monetary policy should focus on asset prices, it is at least that you should find out the following questions: First, how many pathways of monetary policy on capital market. With the development of capital markets, the Western economics and financial theory has given the corresponding answers; Second, the situation and characteristics of China's capital market. As the late start of China's capital market, the development is still not perfect, the market adjustment mechanism is not sufficient, it will to some extent restricts the transmission of monetary policy, which will constitute the reality of constraints of the monetary authorities have to consider; Third, it should be considered the targets of monetary policies. The actual situation in China has led to too much control on the capital market, such as convertible foreign exchange on capital accounts controls, interest rates controls and the imperfect exchange rate formation mechanism, which will affect the transmission of monetary policy. In addition, the structure of China's wealth and consumption habits, the improve level of social institutions and the integration of financial markets, which will impact the transmission mechanism of monetary policy.Therefore, this paper will combine the West conduction of monetary policy theory on the capital market and the status of China's capital market, using of theoretical and empirical analysis, given the relevant policy recommendations.