The Research On The Asymmetry Of Industrial Effects Of Monetary Policy In China

National macro-control is one of the most important measures that governmentdepartments intervene and affect economy, including monetary policy and fiscalpolicy. After the Great Depression, the view that monetary policy is asymmetrical hasestablished. This paper researches the asymmetric effects of monetary policy based onindustry. Since1990s, the control of the monetary policy in China has shift fromdirect control to indirect control. In this period, our currency policy authoritiesfrequently used monetary policy tools to regulate macro-economy. This paper basedon this background, using research results of the domestic and foreign scholars, useseconometric approach to analysis China’s monetary policy industry effect.This paper first reviews the theory of neutrality and non-neutrality of money, andthe effectiveness of monetary policy. Firstly, it summarizes the research by thosefamous scholars in the monetary policy affects on output of industry. And then, itexpounds the transmission channel of monetary policy in industry, including interestrates channels, credit channels, money supply and asset price channel. Then the paperanalyzes the factors on the asymmetric effects in industry, mainly from the industry’sown characteristics and policy support. We select these variables, such as moneysupply (M2), financial institutions credit (LOAN), Interbank Offered Rate (RATE)and stock market value (SMC). In this paper, data extent is from the first quarter of2000to the fourth quarter of2011, including the output of industry and monetarypolicy data. Using VEC model, impulse response function and variancedecomposition, it is concluded that the effect of the monetary policy is asymmetrical.We can get the conclusions as follows: the influence of monetary policy onprimary industry is the most. And to the tertiary industry is the second, the influenceof the secondary industry is the minimum. Based on the above conclusions, this paperanalyzes these causes of this kind of situation, including financial friction differences,market structure differences, state-owned banks credit system and the financingchannels. Finally, based on the empirical and reason analysis, combined with theactual situation in our country, we put forward policy suggestions which help pushforward the country’s industrial structure adjustment and optimization and upgradingof industry.