Research On The Coordination Interval And Control Of Chinese Monetary Policy Multiple Objectives

Monetary policy as the government effective means plays an important role for maintaining economic stability, promoting social development and overcoming the economic crisis. In the "new normal" period, how to make the monetary policy objectives to meet the requirements of the new period is an urgent problem. To study the operation mechanism and coordination control of monetary policy is the basis to solve the above problems. However, the increasingly complex international and domestic situation and the dynamic inconsistent nature of monetary policy objectives make the transmission mechanism of monetary policy complex, and the coordination of monetary policy is more difficult.Firstly, based on summarizing the evolution of the global monetary policy, we put forward the necessity and urgency of taking the multi monetary policy objectives into account, then analyze Chinese monetary policy objectives system. Secondly, we select the index variables of the intermediate and final monetary policy objectives in 1993-2014. Using nonlinear Granger causality test, we study the causal relationship and the correlation degree between monetary policy objectives. Using BP neural network model to simulate the transmission process of intermediate objectives of monetary policy to the ultimate objectives, and identify the dominant factor affecting monetary policy objectives, adjust monetary policy objectives to find multi-objective coordinated interval as well as the optimal value of control variable. Finally, we put forward policy recommendations for the problems in the implementation of China’s monetary policy.The results show that the intermediate objectives M2 and social financing scale have nonlinear Granger causality with the ultimate objectives, the GDP growth rate has the strongest correlation with other objectives. The influence degree of the intermediate objectives of monetary policy on the GDP growth are: the RMB against the US dollar exchange rate, money supply M2, 7 days interbank offered rate, social financing scale; monetary policy multi-objective is coordinated, when theunemployment rate between 4%-4.5%, mainly commercial banks’ non-performing loan rate is 0-2.5%, and international payment balance amounted to $ 400 billion,inflation rate is 2%-3%, the GDP growth rate can keep the level of 7.2% to 7.8%;intermediate objectives M2 controlled at 12% can make the GDP grow faster.