The Research Of Monetary Policy Affecting Stock Price Of China

Since the1990s, with financial innovation, financial liberalization and globalization of capital markets continue to deepen, financial structure and the environment has undergone significant changes. Stock market in financial activities is growing and growing impact on economic growth and other economic variables. Former Federal Reserve Chairman Alan Greenspan has said that the new challenges facing monetary policy in the new era will come from capital markets. Since2006, with the smooth development of the split share structure reform, China’s stock market has gradually entered circulation times, the stock market as the Chinese economy "barometer" of the increasingly significant role, the status of continuous improvement in the macroeconomic, stock The market has become an important part of the monetary policy had to be considered. The financial crisis of2008, a huge blow to the world economy, and also makes our government more and more attention to the impact of monetary policy for the stock market," four trillion investment rescue plan "is an unprecedented bold attempt. However, four trillion bailout of the momentum of our economic downturn alleviate to some extent, but the latest economic data show that the stimulating effect of these economic policies is significantly less than the market expected, while there is a strong hysteresis effect. The real economy,"pick up" as quickly as expected and significant effect of the implementation of monetary policy was severely weakened..2010, stock prices in the low volatility around2900points, one important reason is that the central bank to control inflation, by raising the statutory reserve ratio, to receive less money supply. After2011, the central bank to increase the statutory reserve into the ratio, which play an inhibitory effect on stock prices.As one of the important means of macro-control of our government’s monetary policy, due to the weakening of traditional channels and poor transmission mechanism, the control effect of the economy are obvious constraints. With the booming stock market and its increasingly close links with the national economy, the implementation of monetary policy will inevitably affect the stock market trends and stock market effects of monetary policy to produce a positive role. Therefore, the interactive effect of China’s monetary policy and stock market in-depth study to determine the stock market’s ability to become the new monetary policy transmission channels of monetary policy to play a more effective macroeconomic regulation, has become China’s economy faced in the field of new subject.This paper first introduces the research status of a similar subject, analyzed the impact of China’s monetary policy, money supply, then the money supply for the price of the stock market transmission mechanism, monetary policy for the stock market volatility the effects and principles. An Empirical Analysis through the establishment of the time series model and the Granger causality test to prove that the money supply does the impact of stock market prices, and finally put forward policy recommendations. Innovation lies:on the one hand, the object of this paper and the newer data, from January1999to November2011, the Shanghai index monthly closing price data for the same period of monthly Ml incremental (year-on-year growth rate) is selected as object; the other hand, the empirical analysis section, the paper used at home and abroad is the most widely used theories and models used in financial markets, the empirical analysis, the forefront of the application of econometric methods, analysis of stock market development, monetary policy from multiple perspectives internal mechanism, and comparative analysis of the results, in order to study the results of objective and accurate. Using time series model to overcome the traditional multiple regression methods for non-stationary data regression problem of spurious regression, and before the economic analysis using exponential smoothing adjusted stock price index and M1of the original data, research methods more objective and innovative.