Effect Of Asset Prices In Conducting Monetary Policy In China

This Paper is based on the research of scholars both at home and abroad，which putthe asset prices transmission mechanism of monetary policy as a breakthrough point，madereal estate price and stock price as the research object，chose money supply and interestrate that can represent the common variables of monetary policy to execute theoreticalanalysis and empirical test of the conductive effect of asset price in china.This paperanalyzed the relationship between monetary policy and asset price and the relationshipbetween asset prices and output，studied the conduction effect of asset price transmissionmechanism of monetary policy in china and put forward feasible policy suggestions.I dohope that the research I made in this paper could contribute to the improving of capitalmarket in china，the role of asset price in monetary policy transmission mechanism couldbe welled played，the effectiveness of asset prices transmission mechanism of monetarypolicy could be enhanced to some extent.The first chapter is the introduction， which introduced the background andsignificance of the research in this paper，described the importance of the asset pricetransmission mechanism of monetary policy，and then described the research status both athome and abroad，which viewed from three aspects including the effectiveness of assetprice transmission mechanism of monetary policy，the stock market and real estate market，supplied research ideas of the full text and framework of this paper.At the end of thischapter，I described the innovation point and disadvantages of this study.The secondchapter described the theory of asset price transmission mechanism of monetary policysystematically.Firstly，defined the basic concepts related，and then conducted the analysis，which viewed from the angle of traditional way of transmission mechanism of monetarypolicy，studied the transmission mechanism theory of interest rate，credit rate and exchangerate of monetary policy.Finally，studied the theory of asset price transmission mechanismof monetary policy，launched a detailed discussion on the basis of the theory of asset pricetransmission mechanism put forward by Tobin，Modigliani and Friedman，Brunner andMeltzer，analyzed the impact of monetary policy instruments on asset prices and assetprices on economic output specifically.The third chapter is the empirical analysis of thepaper.Firstly，described the theoretical models and research methods used in this paper，andthen introduced data sources of the sample，the selection of variables and data processingmethods in empirical analysis part.Finally，through the establishment of VAR model，Granger causality test，cointegration test，impulse response functions and variancedecomposition method，Analyzed asset prices transmission mechanism of monetary policy by dividing it to two phases，then draw conclusions of empirical analysis and analyzed thereasons.Empirical analysis shows that interest rate and money supply Granger cause assetprices to certain extent， the first stage of asset prices transmission mechanism iseffective.However，The impact of asset price on consumption and investment is notobvious，the conduction effect of second phase is not smooth.Chapter four drawnconclusions and put forward practical policy recommendations.The results of this studyshowed that There exists asset prices transmission mechanism of monetary policy inChina，but the conduction process is not smooth in the stock market and real estate market，asset prices transmission mechanism were hampered，and therefore we need take measuresto dredge the pathways of asset prices transmission mechanism of monetary policy toimprove the transmission efficiency of the capital market.