Study For The Influence Of Monetary Policy On Stock Market

The stock and the stock market, as the most important part that constitutes the capital market contain so much significant economical content. It is not only a main means to finance directly for corporation, but also a kind of capital subject for the public to invest. In all:it is an effective way through which to improve the efficiency of the real economy Therefore, to study the law of the fluctuation of the stock market and analyze its origin, help investors to decide which to buy, improve the operation of the listed companies, offer the references for the authorities to regulate. All of these constitute the important parts for theoretical study and empirical analysis about the stock market.The reason which causes the fluctuation of the stock market is sophisticated. Firstly, on the macro perspective, the changes of the economy, politics, law and the policy work; Secondly, on the micro perspective, the elements of industry and the operations&management of certain corporate also effect; Thirdly, the affect can come from the changes of the demand&supply; The last but not the least, the expectations of people also play a significant role.In developed countries such as the USA and the Europe with mature stock market, the stock market is their "barometer". However, the Chinese stock market, which stands in the beginning stage, the change of stock price usually doesn’t reflect the changes of the real economy.For example, after2005to2006, when the reform of splitting the share structure occurred, the domestic economy keeps increasing at a high speed, but the Shanghai Composite Index Turned two dramatic roller coaster. Then it is difficult to see the end of the long "Bear" way. It seems that people only take interests in the things such as Stock Reform which can bring immediate gain, and prefer to invest on these chances, regardless with the operation of the real economy behind the stock market. Furthermore, they are lack of confidence in the expectation of the economic development. Chinese stock market is often criticized as "policy market". That is to say, the stock market is subject to interference from the policies, which undermines the judgment of people about the future.Considering the length of the paper, in all problems of the Chinese stock market, we just pick out single part——the influence of the monetary policy on the fluctuation of the stock market. In detail, we do the dynamic studies of long-term fluctuation in the stock market, from the monetary policy point of view.This paper reviews the literatures which study the relationship between the stock market and the monetary policy and the influences the monetary have on the stock market.Learn from previous results, we discuss the general mechanism by which monetary policy affect stock market volatility. We find the mechanism by which some variables such as money supply, the RMB loan amount, and the interbank interest rate affect the volatility of the stock market.Specially speaking, the whole paper contains five chapters, Chapter One is the introduction section which demonstrate the background about this subject, as well as the significance, the direction, the analytical framework and the probable innovation; Chapter Two is the summary of the study at home and abroad about the stock market and the monetary policy. Chapter Three demonstrate the theoretical framework and the mechanism by which it influence the stock market. Chapter Four analyze the influence the monetary policy have on the stock market in both Shenzhen and shanghai by configuring VAR modal Lastly, according to the empirical results in last Chapter, together with the realistic thinking, Chapter Five put forward policy recommendations. at the end of the article we get that, only the government identify their role otherwise we cannot expect the real construction of the rule of law.