Under The Open Economy, International Transmission Of Monetary Policy

Under the open economy, the research on the international transmission of monetary policy for a country is very important. However, the results about the direction and channel of the international transmission of monetary policy from both theoretic and empirical research still remain controversial.This dissertation details the impacts on each other from the shocks of China and the U.S.monetary policies to explore the existence, direction, extent and channel of the monetary transmission between these two countries on the bases of the monetary policy implantations in the framework of SVAR model.The results are mainly as follow:1)The shocks of monetary police from China or the U.S.really influence these two economies under the open economy and there is no beggar-thy-neighbor policy between China and the U.S..2) On the premise of upholding its independence of monetary policy, the transmission to China from the U.S.occurs mainly through the interest rate channel. And to the U.S.,the main transmission channel is trade balance.3) Even if China coordinates to the U.S.monetary policy, Chinese monetary policy variables are to a greater extent influenced by itself and domestic economy. Therefore, we can conclude that China has its independence of monetary policy.This dissertation concludes that China must uphold its independence of monetary policy to achieve its macroeconomic goals under the open economy.