China's Monetary Policy Conduction Effect Research Of The Stock Market

Monetary policy generally refers to the measures taken by the countries to beused to influence economic activity, this measure is to adjust the money supply andchanges in interest rates. Implementation of this monetary policy institutions in China,the People’s Bank of China. At present, China’s socialist market economic system, thisfeature makes the People’s Bank of monetary policy for macroeconomic regulationand control, such as controlling inflation or to stimulate economic growth, but thispolicy will have an impact on other areas, the most direct impact capital markets, thestock market as an important part of China’s capital market in China’s marketeconomy system is indispensable to research the effect of the conduction of monetarypolicy on the stock market is particularly necessary.In Western countries, the developed market economy, the stock market is moremature, foreign scholars earlier studies, the conclusions are not the same. Within-depth development of the stock market in China, the relevant aspects of theresearch launched extensively in the advanced research methods based on theabsorption of the West, domestic scholars, combined with China’s national conditions,have done a lot of research, but in their study and concluded that monetary policy iswhether the stock market impact, what impact does not form a consensus, the impetusof this is also the author for further research.By reading the relevant literature, based on the lessons of previous researchresults from the introduction of China’s stock market and monetary policy began, theuse of relevant theory, two main aspects of monetary policy, that is, changes in moneysupply and conduction effects of changes in interest rates on the stock market, andselect the most recent data, and the use of econometric cointegration tests and VARmodel to empirical research. The main conclusions are as follows: changes in themoney supply and stock market index showed the same relationship to the changes,actual changes in interest rates and stock market index showed the reverse changes inthe relationship, while the dismantling of interbank interest rates impact on the stockmarket is not significant, also found that only short-term money supply on the stock market index, about three months, and the interest rate on the stock market continueda long time, generally more than1year, but interest rates this impact effect there is alag effect, the lag period of approximately two months.Through analysis of the resultsof this conduction effect, and with China’s national conditions, has made the judgment,and how to resolve the monetary policy put forward their views on the problems inthe conduction of the stock market.