The Econometric Research On The Effectiveness Of Chinese Monetary Policy Intermediate Target

Monetary policy is one of the important means of macro-control. The People’s Bank of China shoulder the responsibility of the central bank’s.It is responsible for formulating monetary policy,adjusting policy instruments and after a series of conduction mechanism,achieving the ultimate goals.However,the intermediate target is the important part of monetary policy conduction mechanism. With the development of China’s economic,Financial market has also been a certain amount of optimization and improvement,market-oriented economy has been radically improved. These development may impact the monetary conduction mechanism.the effectiveness of intermediate target of monetary policy may also be changed,the study of monetary policy intermediate target’s effectiveness has important theoretical and practical significance.Now, many domestic scholars has studied the existing intermediate target of monetary policy’s validity.Because of different study methods,different data, the final results are different..In some period of time,the money supply is effective;while in some other period of time,the money supply is weak effective.This article is based on numerous predecessors,studying the effective of monetary supply.Select data from the first quarter of2001to the fourth quarter of2013,testing the effectiveness of the money supply through empirical research.Generalizing the results of the research scholars in the intermediate target of monetary policy effectiveness,and find out the discussion of intermediate targets focus on the money supply, interest rates,inflation indicators,different indicators adapt to different economic and policy environment.Monetary policy authorities choose the intermediate target according to the ultimate goal.Analysis the intermediate target theory of monetary policy and the development of practical theory intermediate target of monetary policy in other countries.The intermediate target theory of monetary policy contains price-based intermediate target theory,quantitative intermediate target theory,Taylor theory and Poole theory.Examine the practice of the intermediate target of monetary policy in some countries,and summarizes the evolution laws of other countries’,other countries’ practice experience is useful for ours choice:intermediate target selection is closely related to economic development and financial developments; While inflation is serious,money supply will be payed more attention;According to the impact of the domestic economy,monetary authorities may give up originally identified target;On the moment of the relationship between money supply targets with the ultimate goal of economic growth or price stability is destroyed,there has been a trend of diversification on the of choose intermediate target;In the case of the effectiveness decreased of interest rates, exchange rates and money supply,Monetary authorities may choose to weaken intermediate targets and directly pegged to the inflation rate.Money supply data adapted from the first quarter2001to fourth quarter2013using VAR analysis method,impulse response and variance decomposition techniques to analysis the relationship between economic growth and price stability with money supply or interest rates.Form the promotion of economic growth and price stability point of view of the money supply is an effective intermediate target,while the validity of the analysis of the interest rate indicators show that the intermediate target interest rate index also effectiveness.Comparing the effectiveness of the money supply and interest rate analysis indicators can be drawn, the interest rate index is more effective than the money supply,while referring to the impact on money supply,economic growth and price stability affect the size,we can draw out the money supply is weak effective intermediate target.During the process of testing the effectiveness of interest rate’s,taking inter-bank as representative of the variable interest rate index,mainly on account of the interbank offered rate is dominated by the market. Although the empirical results show that the interest rate is more effective than the money supply,however,the interest rate market is gradually entering the period of market demand and demand and supply of funds have been able to affect inter-bank offered rate,which can represent parts of interest rate market,the current range of funds that can be affected by market supply and demand is still too narrow, not enough to make an impact on the entire structure of interest rates. Even if the analysis results show that the effectiveness of the interest rate is an intermediate target, but still do not have an alternative interest rate of money supply conditions,even if the money supply is a weak effective intermediate target, but the money supply with the intermediate target of monetary policy as condition in the present or in the future for some time still need to use the money supply index.