| Whether the credit transmission mechanism of monetary policy has been effective has been discussed by scholars for a long time. So far, the credit channel is now recognized as the main transmission mechanism of monetary policy. Before 1998, the central bank aim credit scale as the intermediate target of monetary policy, but after 1998 the supervision of the credit scale has been canceled and loosened. This article first reviews the theoretical development path of the credit transmission mechanism of monetary policy as the theory foundation of this article, and examined the macro environment of whether there exists the hypothesis of credit transmission channel. As we all know, VAR model is based on the higher limits to the degrees of freedom of variables, the scope of application is not widely adopted. In order to explain the real activities in economy, we will adopt a far more supreme model, FAVAR model, as an extension of the empirical part. On the one hand it can provide a more realistic result, on the other hand can also add more information about the demand side of credit scale through FAVAR.After the financial crisis, the pace of reform has been accelerated noticeably in all aspects of our society, and as the credit scale in proportion of the total social financing has dropped, the existence of the credit transmission channel in the transmission mechanism of monetary policy is worthy to be explored again. This paper uses VAR model and FAVAR model to conduct empirical tests based on the reality of the economic situation in 2008 to 2013. Test results show that, comparing to monetary channel, the credit transmission channel is more effective, and rely on a lot of macro information, FAVAR inferred that credit demand have a strong impact on the size of the credit. Thus we recommended that the central bank continue to focus on the credit scale indicator, and gradually release on the supply of credit monitoring after the financial markets become more comprehensive and mature. |
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