The Study Of The Spillover Effects Of Quantitative Easing Monetary Policy From Japan On China

With the deepening of economic globalization, trade and economic ties betweencountries continue to strengthen, monetary policy of a country not only have animpact on the domestic economy, but also, have an impact on other countriesthrough trade channels, capital flows, interest rates and exchange rate channels. Sincethe international financial crisis in2008, some of the big economic powers orcoalition countries have taken unconventional monetary policy, in response to thefinancial market turmoil and domestic recession situation. The scale, content andstructure of the Central Bank’s balance sheet are the major adjustment tool, ratherthan rely on traditional nominal interest rate. Bernanke (2009) said: the non-traditional monetary policy which aims to expand the size of central bank balancesheets is known as " quantitative easing." Japan is the representative countries ofquantitative easing monetary policy.In2001, Japan was the first country whichadopted the quantitative easing monetary policy. In the end of2012, Shinzo Abe, thenew Japanese Prime Minister carried out indefinitely Super quantitative easingmonetary policy. The quantitative easing monetary policy of Japan is aim to changethe state of the domestic deflation and achieve a certain degree of inflation, make theeconomy out of a prolonged slump. The following article which under thebackground of a large-scale quantitative easing monetary policy in Japan, is aimed tostudy the impact of Japan ’s quantitative easing monetary policy spillovers to China.This paper is divided into five parts: The first part of the article describes theresearch background, significance and research ideas. The second part is the wholetheoretical basis of the article. From the Mundell-Fleming-Dornbusch model to thenew open macroeconomics model, introduce the mechanism of the effect of monetarypolicy spillovers and spillovers analyzed separately. While adding game theory toexplain monetary policy spillovers. In this section, focuses on monetary policyspillovers channels, respectively, from trade, capital flow, interest rate and exchangerate analysis of cross-border spillovers channel mechanism of monetary policy. Thethird part introduces the practice of quantitative easing monetary policy in Japan,pointing out the ultimate goal and the intermediate target of monetary policy ofquantitative easing, the distinction between "quantitative easing " and " credit easing", and Japan’s quantitative easing monetary policy transmission mechanism elaborate system. The fourth part is the empirical research, this article uses SVAR quantitativeanalysis model, select Japanese broad money supply (JAPM2), China’s grossdomestic product (GDP), China ’s broad money supply (M2), China ’s consumer priceindex (CPI), China ’s exports (EX) and imports from China (IM) for the studyvariables. The fifth part on the basis of the above analysis and empirical testingtheories and conclusions drawn on the policy recommendations accordingly.By co-integration test and VAR test, we draw the following conclusions: Japan’squantitative easing monetary policy has a negative spillover effect on China’s output,to some extent, has an increase in inflationary pressures in China, will increase China’s money supply,will lead to China ’s foreign trade conditions deteriorate, reducingChina ’s exports and to a certain extent, an increase in Chinese imports. This paperargues that the policy authorities should be under the prudent monetary policy andloose fiscal policy, timely and appropriately fine-tune monetary policy, strengthenthe management of liquidity; strengthen short-term capital inflow controls to preventhot money inflows; actively participate and take advantage of G20and otherinternational The new economic policy coordination mechanism.