| Monetary policy is an effective tool in the macro-control, The Central Bank of China achieves the ultimate goal by manipulating policy tools which affect the intermediary goals.The choice of intermediary targets is of crucial importance for an effective-monetary policy operation framework. The two conditions of the efectiveness of the intermediary targets includs that: the targets need to be highly relevant to the ultimate goals which includs price level, GDP, employment and balance of international payment.; The changing of the intermediary targets can significantly affect the ultimate goal which can be observed and controled by the monetary authorities.Since the beginning of the reform and opening, China’s credit scale and cash in circulation were part of the plan for national economic development, so we take them for granted to be our country’s monetary policy intermediate target. But when the government constantly opening economy control, the market continued to deepen, China’s central bank decided to cancel the restrictions on the credit scale, as a result, the simple sum of monetary aggregates index has been adopted as the intermediary target from then on. But with the change of the financial environment, the simple-summed monetary aggregate is difficult to forecast the ultimate goal effectively, whether in theory or in practice.Therefore, the analysis of modified monetary-aggregates index is of important theory value and practical significance.This paper would explore to compare the effectiveness of these different targets by the study of a combination of comparative analysis and empirical analysis, and combined with previous research, in-depth to explore the mechanism of action of the Divisia monetary aggregates system to predict the ultimate goal. Analysis of the current status of China’s intermediary target, combined with practical experience of foreign choice of intermediary target, to expect to give some suggestions to China’s monetary aggregates. |
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