The Study On Monetary Policy Power Configuration From The Viewpoint Of Constitutionalism

Although the economic of China recovered steadily, the inflation is still a question since the economic crisis happened in 2008. The four goals of monetary policy are currency stability, economic growth, full employment and the balance of payments. And the currency stability is the basic of development of economy. The central banks all aim to achieve the four goals when they making monetary policy. The monetary policy of China is taking the money supply as intermediary target and the currency stability as ultimate goal. The direct cause of inflation is excessive money supply, but the real reason is the system defect. Citizens granted the monetary distribution rights to the government. The government decides the money supply. The inflation tax is a kind of special government revenue. The government can realize tax revenue without legal procedures. The inflation tax can finance budget deficits, increase fiscal spending, increase fiscal revenue and reduce unemployment. The government has motivation to excessive money supply for more inflation tax. The central banks as currency board are so easy been interfered by governments or financial institutions that it cannot make monetary policy independently. In essence, the inflation tax is implicit tax. It infringes constitutional property right of citizens. The constitutional property right is the basic of citizen’s human rights. The modern paper currency system is currency contract. The basic of the modern paper currency system is government credit. If the government cannot hold currency stability, it will be harm to government credit. So it is very important to distribute monetary policy power, but there are some problems about it of China. We need to reconfigure the power of monetary policy of China to keep the rate of inflation in a reasonable range, so that we can protect the constitutional property right, citizen’s human rights and government credit.This article consists of six chapters. Chapter one introduces the background of this paper, and states the foreign and domestic views and introduces the writing methods. Chapter two introduces the theoretical basis of monetary policy power, include of the evolution of property right and the connotation of currency contract. Chapter three introduces the current situation of monetary policy of China. It introduces the monetary policy framework and the relationship between the central bank and the government or the supervision department. Chapter four analyses the problems of China’s monetary policy power configuration and influence. The monetary policy of China lack independence. The supervision and accountability system is not sound. It is harm to protect currency stability, government credit and constitutional property right. Chapter five introduces the experience of developed countries’ monetary policy power configuration, such as the USA, Germany and Japan. Chapter six discusses how to distribute monetary policy power at the constitutional level. This part elaborates from establish the central bank constitutional status, define the monetary policy power boundaries between the central bank and the government, standard system of the central bank’s monetary policy decisions and a sound system of supervision and accountability.