Statutory Deposit Reserve Ratio Of Money Supply For The Empirical Study Of The Effects

According to China's macro-economy emerged in the form of excessive investment growth, trade surplus and other issues, China's central bank has raised statutory deposit reserve ratio 18 times and benchmark interest rate of RMB deposits and loans 8 times in total.In terms of the frequency or intensity of the monetary policy,the monetary policy measures taken by the central bank in this period are unprecedented in history. Facing the impact of financial crisis on of China's economy, the central bank downed the deposit reserve ratio for three times in the second half of 2008. Though the economy was stabilized by exploitation of over loose fiscal policy and monetary policy in 2009, risk of inflation was brought here, too. The central bank was forced to raise deposit reserve ratio for 6 times in 2010. it becomes a high frequent used tool in our country.The adjustment of the legal deposit-reserve ratio,as a monetary policy tool,affects the liquidity of bank,expands or shrinks money by means of the multiplier effect,and controls the supply of money.The central banks of the developed countries seldom use it because its shock maybe too strong to the economy.But it becomes a high frequent used tool in China. Therefore, the study of the reserve is a valid tool or not for the formulation of monetary policy has very important significance.