Empirical Study Of European Quantitative Easing Policy In The Effect Of China’s Macro Economy

With the development of international trade and economic globalization, economic and trade cooperation between countries tend to be more closely. Since the United States economic crisis and the European debt crisis erupted in 2008, the development of globalization has deepened the proliferation and spread of the crisis, and global economic growth has slowed down. In order to cope with the global economic crisis, the developed countries especially the US, Japan and Europe have taken unconventional quantitative easing policy, by lowering the benchmark interest rate, buying the bonds and other assets, to inject a lot of liquidity into the market and stimulate economic development. October 2008, the European cut its benchmark interest rate and subsequently implemented refinancing operations plan, covered bond purchase program, Securities Markets Program, outright monetary transactions and many other measures. Those programs brought the massive increase in the money supply, promoted the country’s economic development, had a tremendous impact to other countries in the world economy. Europe is the largest trading partner of China and keep a close economic relationship. Therefore China affected by the shock of European quantitative easing policy more widespread and profound, how to deal with the impact on China’s economy is in dire need of solving the problem.The first part of this paper describes the background and significance of the European quantitative easing policy, detailed summarizes the domestic and foreign research scholars, on the basis of analysis innovative research on the topic of this article, data, the variables selected. The second part analyzes the quantitative easing policy implementation and international transmission channel theory. The third part highlights the European quantitative easing policy implementation and policy effects of specific operations. The forth part introduces a particular theory of the empirical analysis SVAR model and the macroeconomic impact of European quantitative easing, while building SVAR (6) model selected six variables, including the European monetary supply (M3), China’s gross domestic product value (GDP), monetary supply (M2), EU bilateral exchange rate (ER), domestic interest rates (Shibor), net exports to Europe (NE). After the adoption of the model stationary test and Granger causality test, estimate the short-term constraints on SVAR model, then built response function and variance decomposition analysis of quantitative easing. The result is Chinese macroeconomic negative spillover effects to European quantitative easing. In order to cope with the impact of Europe quantitative easing on Chinese macroeconomy, China needs a reasonable monetary policy, strengthen supervision of capital mobility, speed up exchange rate reform, accelerate industrial upgrading, by taking various measures to enhance China’s comprehensive national development, reduce the role of foreign economic policy shocks on China.