Analysis Of The Effectiveness Of Monetary Policy In China

The effectiveness of the china monetary policy is a long-term existed financial study topic since 1949. The issue , however, has become a very important problem after the central bank regime was established in 1983. A series of difficulties have emerged in the process of the developing market economy in china pushed forward the study of the monetary policy. The monetary policy means that the government influences on the economy action by the central bank and the financial market impacting the supply of the currency. The monetary policy is the very important measure of the government adjusting the macroeconomics, but also is the incentive factor of the microeconomics. Obviously, the different microeconomics basis, the different policy and the different policy mechanism will result in the entirely different effects. The aim of the government and the central bank is to establish a monetary policy system that can benefit a lot to the individual market. Our monetary policy is transferring from the direct controlling to the indirect adjusting after the period of the planned economy regime and the early socialism market economy regime. Nowadays, the entire monetary adjusting policy is being improved step by step and is more flexible and effective. The thesis will aim at the study of the monetary policy. The entire thesis is divided into four parts. The first part gives the definition of the monetary policy effectiveness: the effectiveness of the monetary policy is the comments of the effects after the carrying out monetary policy. Then, we discuss the differences of the effectiveness of the monetary controlling, the effectiveness of the monetary function, the effectiveness of the monetary policy instruments, the effectiveness of the monetary policy medium goals, the effectiveness of the monetary policy final goal, the effectiveness of the central bank, the effectiveness of the commercial banks and the other financial institutes, the effectiveness of the companies and the individuals, etc. In general, the conditions of the effective monetary policy are systematic which include the direct adjusting subject, the medium subject, the micro object, the final goal of the monetary policy, the medium goal of the monetary policy, the instruments of the monetary policy, the monetary market and the capital market etc. Then, we try to establish an index system such as the basic coefficient of the effectiveness, the time-lagged index, the structure of the basic currency, the value of the money multiple, the quality of economy growth, the fluctuation situation of the economy period etc. The irregular macro financial policy is regarded as the worst offender of the economy fluctuation and is the main reason of economy periodically changing. The last of the first part shows the shortcoming of the monetary policy in china. When we analyze the effect of the monetary policy in china, on one hand, we must master the characteristics of the monetary policy macro control, on the other hand, we can't ignore the properties of the structure adjusting. The second part mainly discusses the relationship between the effectiveness of the monetary policy and the transmitting mechanism of the monetary policy to analyze the characteristics of the monetary policy transmitting mechanism. The part discusses the issue according to the following three periods: from 1953 to 1978, from 1979 to 1984, from 1985 to 1997. Simultaneously, the part analyzes the barriers of the monetary policy transmitting mechanism in china. The part suggests that we should strengthen the unique of the central bank and make it become the real maker of the monetary policy. At the same time, we should reconstruct the commercial banks in china to reduce the bad assets of the commercial banks. On the other hand, we should strengthen the supervising the commercial banks in china to avoid the systematic risks. Then, the part discusses the choice of the final goal of the monetary policy transmitting mechanism, the choice of the medium goal of the monetary policy tran...