Monetary Policy Transmission Mechanism Under The Conditions Of Financial Liberalization

The research of the transmission mechanism for monetary policy has always been the focus, many experts and scholars have made the deep research. The existing study mainly focused on the alternation of the transmission channel and the analysis of the transmission situation, but the study, which researches the transmission mechanism under the condition of the financial opening and integrates the transmission mechanism into the financial opening, has not been extensively made. This paper addresses itself to analyze the integration of the transmission mechanism for monetary policy and the financial opening, focuses on the interest rate, exchange rate and the capital market to explore the transmission mechanism of monetary policy.Firstly this paper briefly introduces the traditional theory of the transmission mechanism of monetary policy and the research information for the transmission mechanism of the monetary policy; secondly analyzes the alteration information of the transmission mechanism under the financial opening: the interaction between the interest rate and the exchange rate, the increasing function of the capital market for the transmission; then on the basis of the second part, the econometrical study shows that the current transmission mechanism of our country highly correlates with the total amount of the monetary supply and the credit loans and the interest rate and the exchange rate and the capital market do not function properly, which is in accordance with the actual financial condition of our country, that is we still execute the policy of the interest rate restriction and the managerial floating rate system; finally, regarding how to improve the current transmission mechanism efficiently, this paper makes some concerning policy suggestions.