The Formation Mechanism Of The Public Expectations And The Management Of Monetary Policy Expectations

In view of the uncertainties of the macro-economy,the public expectations management has become increasingly important in the formulation and implementation of monetary policy of the central banks.On the one hand, the public expectations directly affect the economic ehavior of individual economic decision-making, and thus reflect the actual process of economic operation and macroeconomic stability.On the other hand, as subject of the monetary policy formulation and implementation.the central bank can use their own information resources to influence the public expectations and pass the economic policy information,guides the formation of public reasonably expectations.Accordingly, In the current complicated economic situation,how to manage the public expectations has become the focus of national central bank’s monetary policy implementations.The public expectations management has become one of the main objectives of central banks macro-control.At present, the Central Bank of China has not yet formed a system sound monetary policy management system on public expectations and lack of public exceptations management experience.Therefore, in order to build and improve the public expectations management system in China.We should be in-depth analysis of the the expected formation mechanism and influencing factors of the public expectations. And put forward countermeasures and Suggestions by combining the characteristics of our public expectations. Meanwhile we also should draw lessons from foreign advanced public expectations management experience and gradually build our country monetary policy public expectations management system.First of all, public expectations management should be clear what is the public expectations. In this article we will anticipate concept defined as the public use historical and real economic information about future economic operation and the relevant economic variables to make estimates and predictions In order to expect the biggest gain before making economic decisions. Second, Public expectations, especially the measurement problem in inflationary expectations, as a psychological factor, How to quantify the public expectations has become a matter of concern to scholars researchers. Public expectations are greatly influenced by the economic behavior of individual subjective psychological factors. How to quantify this subjective judgment which includes a strong quantitative uncertainty and variability will become one of the difficulties of public expectations management.The current public inflation expectations metric method mainly include Questionnaire, inflation index tools and econometric model method, etc. the Central Bank of China uses questionnaire method to inquiry residents’inflation expectations the Central Bank of China mainly uses urban depositors questionnaire survey form in terms of public expectations measure.The central bank chooses20000urban depositors in50cities around the country in each quarter. The content of the survey mainly includes Residents overall judgment of current economic form、Residents feelings of prices、Income and employment feel situation、the willingness to savings, investment, and spend. Data obtained from questionnaires is mainly qualitative data, The Central Bank of China shows residents inflation expectations index by using diffusion index method. Third, the public expected forming mechanism, influence factors and the analysis of the characteristics. From the evolution history of public expectations theory, the public expectations forming mechanism theory can be summarized as static expectation theory, extrapolated expectation theory, adaptive expectations theory and the rational expectations theory. There are many factors which can influence public expectations.In combination with the practical situation of economic operation in China, the factors includes public expectations itself, monetary policy and the actual level of inflation, economic growth, asset prices and market maturity and so on.These factors such as multiplicity of monetary policy targets, the public expectations complicated sources, etc, have brought many difficulties to our country public expectations management. Finally, the key of the public expectations management is the construction of policy management system. Based on the empirical and forecast management practical experience of western developed countries, we put forward the most direct and effective way to influence public expectations is to improve the monetary policy transparency and to strengthen the central bank monetary policy between the public and information communication.We should not only take the factors of public expectations into account but also should emphasize the influence of monetary policy transparency enhancement. On the basis of these.we put forward the short and long term approach to construct the management system of China. In the short term, The Central Bank of China should emphasize in monetary policy intervention and guidance to the public expectations. In the long term,public expectations management should put special emphasis on the system of the monetary policy of public expectations management construction and improve forward-looking of monetary policy operations.