Asset Price Volatility And The Empirical Study Of Monetary Policy Influence Each Other

In recent years, volatility of asset prices has a great impact on themacroeconomy. Foreign central banks made asset prices to the monetary policy. The purpose of this study is discussed on the theory and practice of if assetprices should be used as the indicator of monetary policy-makingconsiderations.This article uses modern measurement methods that vector autoregression model, five groups of empirical research, using both pricevariables and housing variables, from the pros and cons of both sides revealsthe dynamic interaction of asset prices and monetary policy, the long-runequilibrium relationship.This paper studies the content: firstly, it studies of asset prices affectinflation thereby affecting monetary policy; secondly, asset prices affectthe conduction path of inflation; Thirdy, the monetary policy affect assetprices. Stock and housing prices in the most volatile asset prices, so in thispaper, the stock and housing prices on behalf of the asset price fluctuations. This article’s conclusions: Asset price impact on monetary policy. Assetprice inflation significantly. Through aggregate demand affects inflationpath is basically smooth, which is smooth conduction pathways throughconsumption, through the transduction pathways investment is not smooth.Monetary policy on the regulation of the stock price is significantlyeffective price regulation is invalid. To sum up, China’s monetary policyshould be developed with a focus on asset price fluctuations, but as nosufficient basis for monetary policy considerations indicators. TransmissionMechanism based on aggregate demand, asset prices affect inflation and thusthe study of monetary policy conduction path.