The Effects Of China’s Monetary Policy During The Financial Crisis

Since the beginning of the second half of 2007,the financial crisis triggered by the U.S.subprime mortgagecrisis sweeping the globe,leading to international finance and economic order undergoing profound changes.Facing the complex economic environment,the People’s Bank of China adjusted the direction of monetary policy,used various of policy instruments,adopted series of flexible and effective measures,cooperate with fiscal policy to ensure the economy maintaining an average annual growth rate of 8%.To evaluate the specific effects of monetary policy during the financial crisis,combine with China’s current economic characteristics,explore to enhance the effectiveness of monetary policy has very important theoretical and practical significance.The article based on the New Keynesian monetary policy framework,try to contain money supply and asset prices in the interest rule as the monetary policy response equation. Select from January 2007 to February 2013 monthly data,using GMM method to estimate the simultaneous equation model couplet,tesing empirical results during the financial crisis of monetary policy.The study found that,the inpact of monetary policy on output is existed,the growth of money supplly played a major role,so using the money supply as the intermediate target is still reasonable.The impact of interest rates on output is relatively weak,and in terms of inflation,interest rule have not yet reached a significant effect:this is because imported inflation make the interest instruments facing difficulties,and China’s interest rate market mechanism has not been perfect.For empirical research findings,the article attempts to make relevant policy recommendations from monetary policy system,improve the exchange rate system and promote market-oriented interest rates.