Empirical Study On Industrial Effect Of Monetary Policy And Its Influencing Factors

Since the reform and opening up, China has gradually shifted from a planned economy to the market economy system. Monetary policy has been used as the main tool of China’s macro-control. The effect of different monetary policy is different, and at the same time, China’s vast territory, distinct regional differences, there is a big difference in the characteristics of the regional industry structure. Monetary policy will make the pathway around the different effect of monetary policy on different sectors conduction velocity and conduction depth significantly different, resulting in different areas of monetary policy effects. Therefore, the empirical studying of the asymmetry of the effect of monetary policy in China industry, understanding asymmetric effects of monetary-policy in China cross-industry heterogeneity, and studying the generation mechanism of asymmetric effects of monetary policy in the industry will help the relevant departments in the effective use of the macroeconomic performance of monetary policy regulation, and at the same time, based on the effect of differences in different industries, it wil promote the reasonable adjustment of the industrial structure in China, and the coordinated development of regional economy, in order to achieve the sustained and healthy development of the economy.This paper starts from the actual data of the industrial based on Markov transfer Model, and China’s economic cycle is divided into the "moderate growth" stage and the "high growth" stage. It uses Markov transfer model of the single variable two-zone system to seek the smooth transition probabilities of the two stages of economic cycle of China. It use the money supply balanced equation to identify the impact of monetary policy. We assume that the money supply depends on the rate of inflation, real output growth rate lagged term investment growth rate and the effective interest rate. The regression residuals explain positive and negative impact of monetary policy. If residuals greater than zero, it said positive currency impact direction, and if residuals less than zero, said the negative currency impact direction. The measure of the currency impact and the actual implementation of monetary policy in China coincide. Then based on Markov transfer model, we measure the smooth transition probabilities of the two stages of the economic cycle. We use the linear regression model derived from the Markov transfer model, in the upward phase and downstream stages of the economic cycle, to measure the long-term effect of monetary policy of China on the33sectors of China industry, and by measuring these two indicators, we get the results of the impact of China’s monetary policy on the various sectors of the industry very easily to analyze the asymmetric effects of the monetary policy of the two stages on the role of the various sectors. We found that most of the industries are not sensitive to the loose monetary policy. In contrast, almost all of the33industry is more sensitive to the tight monetary policy. By comparing these two indicators, we found that the effect of monetary policy in most of the industry has different degrees of asymmetry, and there is a clear difference between one industry and the other industry.To further identify the reasons for this difference, this paper further specific analysis factors affecting the degree of asymmetry of monetary policy in China based on cross-sectional regression model. We start from three transmission channels of monetary policy:the interest rate channel, the exchange rate channel and the credit channel. In this paper, we use the six industry balance sheet indicators to portray the characteristics of the industry, and they are the industry investment intensity, the industry per capita capital, the export ratio of the industry, the financial leverage of the industry, the firm size and the industry working capital. The industry investment intensity and the industry per capita capital measure interest rate channel, the industry export ratio measures the exchange rate channel, the firm size, industry financial leverage and the industry working capital measure the credit channel. Empirical analysis shows that the higher the industry investment intensity, the ratio of per capita capital and the industry export industry, the stronger the effect of the monetary policy in the industry and asymmetric effect of the monetary policy is stronger, and the higher the firm size and the financial leverage in the industry, the smaller the industry affected by the monetary policy and the asymmetric effects of monetary policy on this industry is smaller.