A Study On The Rate Transmission Mechanism Of Dual-track In China

Interest rates transmission mechanism is a process effecting the whole nationaleconomy, which reflects the way that monetary policy regulate interest rate, and how other economic variables, such as consuming and investment, had been caused through it. Since the90s of the20th century, with the world’s financial deregulation relaxed and financial innovation accelerated, it has been more difficult in the money supply indicators’ definition, statistics and monitoring, and it has been weakened continuously in the relationship of macroeconomic variables between money supply, national income and prices. Therefore, many western countries turned their monetary policy framework into interest rate-driven, which means that interest rate becomes the main channel of monetary policy transmission in these countries. As far as Chinese conditions, it has great theoretical and practical significance to carry out research of interest rate transmission mechanism in China in such a domestic and international environment of the interest rate market reforming deepened and the status of the interest rate transmission mechanism gradually improved.In this paper, it has firstly introduced domestic and foreign interest rate transmission mechanism.Then introduced the innovation and the inadequacies of this paper.In the second chapter, this paper introduced the theory of the interest rate transmission mechanism. Include interest rate transmission theory, credit transmission theory and other asset prices transmission theory.In the third chapter, this paper introduced the monetary policy transmission mechanism history of major countries,sunch as United States, Britain, Japan and India.And then introduced the development history of Chinese interest rates.In the fourth chapter, We developed a theoretical model to illustrate the conduct of monetary policy within the framework of dual-track interest rates and juxtaposition of both price and quantity-based policy instruments.In the fifth chapter, in order to test the results predicted by the theoretical model and its calibration, we construct and estimate two empirical models using daily data from both money and bond markets.We estimate how market interest rates react to policy shocks after controlling for other factors.The last, according to the analysis of theoretical and empirical part, we give two proposals on monetary policy and interest rate market.