The Research Of China’s Currency Policy Effect Under The Background Of The U.S. Quantitative Easing Monetary Policy

Since the outbreak of the subprime mortgage crisis, the United States, Japan, Britainand other developed countries have adopted various policies to prevent the economicrecession, but these tools didn’t play the corresponding role. These countries are facedwith financial deficit, debt dilemma and h the interest rates which have fallen to close tozero, the major economies have started to turn to unconventional monetary policy-thequantitative easing monetary policy. Quantitative easing monetary policy was originallyused by the Japanese government for its domestic bubble economic crisis at the end ofthe nineteenth century, and not widely used. The large-scale implementation ofquantitative easing monetary policy in the world is the first time, so what kind of impactit will produce on the world economy becomes a research hotspot.In this paper we will research what kind of influence will produce on china’smonetary policy and the adjustments of china’s monetary policy under the background ofthe quantitative easing monetary policy.⑴This thesis proposes the topics of the study and the significance of the researchin the first place, and then literature review of domestic and foreign research, and finallythe main innovation of this study.⑵In this paper the quantitative easing monetary policy theory is studied, includingthe definition of the quantitative easing monetary policy, the operation mechanism andthe inspection on the quantitative easing monetary policy effect.⑶I will do two empirical studies in this paper. First of all, we applied SVAR modeland impulse response function to the Chinese monetary policy spillover effect from thequantitative easing monetary policy of American. It includes the test of the Chinesemonetary policy environment and the test of the impact on the Chinese monetary policyinspection. We found that the quantitative easing monetary policy has a positive effect onChina’s output level and also has a positive effect on Chinese expansionary monetary policy. Then on the basis of that study we will apply the VAR model and variancedecomposition approach on two stage of China’s monetary policy-the expansionarymonetary policy and the tight monetary policy, and then we will analysis the reason ofthe Chinese monetary policy adjustment from two respects-the international reasons andthe domestic reasons.⑷In order to cope with the influence of the quantitative easing monetary policy onthe China’s currency policy, this paper will put forward several feasiblesuggestions-based on the empirical research conclusion-from the influence of thequantitative easing monetary policy on China’s monetary policy environment and theinfluence on China’s currency policy effect.