China's Central Bank Independence And The Inflation Rate Correlation Studies

When the time officially entered in 2011, a word most often heard is prices, and the first is the Kang Shifu the convenience of fast food industry, represented by the collective announced price increases, and then they came in recently, prices of the Cosmetic industry together The rumors, of course, in interviews with the Development and Reform Commission clearly denied the rumors after. But from our daily life, you can still feel the immediate price rise significantly, and for a statement about the coming era of inflation. China economy, the pressure of rising prices are becoming more and more. State in this year's government work report made it clear to price stability as the number one task of this year's work. In fact, since the year 2010, the PBOC has taken a lot of measures, such as major commercial banks continue to raise deposit reserve ratio, until recently a record high of 20% and the New Year, the first month the sixth days of the announced interest rate, etc.. Attempt to control the inflation trend,although the People's Bank of China, a series of tightening monetary policy to ease the inflationary pressure has played a certain relief, but it seems that effect is not so obvious. Based on this, can we change a point of view, from the correlation between central bank independence and inflation to see whether it can provide new ideas for inflation control. In fact, there are many articles about this. So this article is based on earlier research, using relevant theories and methods of measurement of central bank independence and inflation the correlation between the rate of concrete evidence, and draw conclusions based on the relevant policy recommendations.In order to effectively control inflation in China has become increasingly prominent current situation, we need to further strengthen the independence of our central bank, from that perspective, we give the following policy recommendations, first of all, the personnel system reform of central leadership, according to empirical findings also reference to the advanced experience of foreign countries, we should be more explicit central bank governors of the appointment and removal procedures to determine more effectively increase the independence of the People's Bank of China. Secondly, we need to be more explicit on the central bank's monetary policy objectives of the regulations. For example, like other countries with inflation targeting as to stabilize the CPI or other price index as a monetary policy objective, based on existing practice shows that this can more effectively control inflation. Third, related to the NPC Standing Committee should strengthen the formulation and implementation of monetary policy, supervise, and coordinate relations with the State Council. Concrete measures we can establish the People's Bank of China National People's Congress on monetary policy and effective accountability mechanisms, so that you can more effectively monitor the People's Bank of China, but also help increase the independence of the People's Bank of China. Fourth, improve monetary policy decision-making body, independent monetary policy. China is concerned, is to reform and improve the composition of the Monetary Policy Committee to increase the financial experts that the number of non-governmental organizations on behalf of people, so that it can represent the policies benefit more people. Finally, to speed up supporting the system, speed up the legal system of our country as soon as possible to become a more perfect socialist legal system.