An Empirical Study On The Fluctuation Of Monetary Policy Transparency To Financial Asset Price Volatility

Financial asset price volatility has always been one of the focuses of the researchers, it not only involves the profit and loss, but also further induce the macroeconomic instability. Due to our current financial market is not strong form efficient, therefore we can be in the perspective of statistics, constructing the corresponding economic variables, to explain and forecast financial asset price volatility. This paper attempts to build the relationship between monetary policy transparency and the financial asset price volatility. In the early study of monetary policy transparency, people always are from the qualitative aspect to the discussion, and with the need of empirical research, the measurement of monetary policy transparency has become a crucial problem. In this paper, on the basis of the existing monetary policy transparency dynamic index, we consider the monetary policy transparency has significant lag effect, so we revised on monetary policy transparency dynamic index. In the study of monetary policy transparency of financial asset price swings, we first consider the mature financial markets represented by the United States, found in the stage we selected, that has a significant negative correlation between the monetary policy transparency and financial asset price fluctuations. In the monetary policy transparency is volatile period, revised index and financial asset price volatility exist significant positive correlation, this shows that under certain conditions, the larger change of transparency can lead to financial markets can’t adapt, resulting in an increase in volatility. Later, in order to study whether the transparency of monetary policy transmission mechanism is widely exists in other of the markets, we have discussed the emerging market countries represented by China’s monetary policy transparency related issues, found in China’s monetary policy transparency does not exist from the beginning, but with the domestic financial market becomes more mature, the effect also has significant relationship in the near future.According to the conclusion of this paper,personnel can explain financial asset price volatilityfrom the perspective of monetary policy transparency, the central bank can be more reasonable to arrange the implementation of monetary policy transparency, our government is developing the stable and mature financial market, this paper will have positive reference value.