The Dual Asymmetric Effect Of China’s Monetary Policy

Adjusting and rationalizing the industrial structure is an important task for global economic growth, meanwhile, it is also China’s12th plan priority. Establishing and adjusting a rational industrial structure can promote economic and social development and improve people’s material and cultural life. During the Great Depression in20th century, expansionary monetary policy is basically not played an effective role in stimulating economic growth. Then scholars began to realize there exists asymmetric effects in the direction of monetary policy and also it is the start of study of asymmetric effects of monetary policy. Subsequent research found that there is an asymmetric effect of monetary policy in industries and regions. China’s monetary policy pays more attention to the overall adjustment throughout the implementation of monetary policy from1996to2012. If monetary policy is not based on the asymmetry effect laws of various industries,"one size fits all" monetary policy may promote the development of an industry while suppressing the development of other industries, leading to a structural imbalance. Research on dual asymmetric industrial effects of monetary can improve the relevance and efficiency of monetary policy, leaving the economic structure to a better shape, which has great theoretical and practical significance. For one thing, the proof of dual asymmetric effects of monetary policy on industrial level will enrich the research on the asymmetric effects of monetary policy, which has a certain theoretical significance. For another thing, this paper studied different industries’reaction mode and rules to the monetary policy shocks from an empirical point of view and can provide a reference suggestions to the central bank, so it has a practical significance.In order to study the dual asymmetric effect of China’s monetary policy on industry level, this paper explored mainly from three aspects.Firstly, this paper reviewed the literature research on asymmetric effects of monetary policy and analyzed the relevant literature study of the reason on asymmetric effects of monetary policy. But so far there isn’t a unified conclusion about the reason on asymmetric effects of monetary policy. Secondly, this paper recalled the overview China’s monetary policy from1996to2012and analyzed the transmission mechanism of monetary policy from the view of interest rates, money supply, asset prices, exchange rates and credit. And then the paper found there existed asymmetric effects of monetary policy on industrial level by using VAR model and Impulse Response Function.Finally, the monetary is divided into positive and negative impact by using HP filter and also the tertiary industry’s economic cycle is grouped into two states:high growth and low growth. And the research results proved there existed dual asymmetric effects of monetary policy on industrial level.The innovation of this paper is mainly reflected in the following two points.In the first place, this paper sorted out horizontal and vertical research about the asymmetric effect of monetary policy. It packed horizontal research about the asymmetric effect of monetary policy from the view of industry, other macro variables and economic conditions and also sorted out the vertical level from Different economic entities, industries and regions. In the end, it generalized research methods and reason on asymmetry effects of monetary policy.In the second place, the monetary policy is divided into positive and negative impact by using HP filter and also the tertiary industry’s economic cycle is grouped into two states:high growth and low growth. Compare with the existing research in this field mainly stay in a single level, this paper is innovative.