The Regional Effects Transmission Of Monetary Policy

31 provinces and municipalities, in our vast country, have significant differences between each other in the degree of openness, industrial structure, the level of marketization, developed of the financial market, population structure, consumption levels and many others. Compared to provinces and municipalities in central and western, the eastern have higher per capita income, better financial services, a higher degree of openness and consumption, more developed secondary and tertiary industries. But the unified monetary policy, which is adopted in our country, was formulated and implemented to achieve the goal, relevant to macroeconomic in all country, ignores the differences across regions. There is no doubt to make economists ask a question: does unified monetary policy, which is adopted in our country, make same effects to outputs in 31 provinces and municipalities? This question also derives a hot spot in the field of monetary economics-the Regional Effect of Monetary Policy.First of all this paper reviews the related researches on the regional effects of monetary policy, describes the basis of relevant theories. Based on this theories and researches, this paper also analyses current situation of the regional effects of internal and external transmission of monetary policy.Based on the difference of regional economic and financial development in our country gradually expanding,this paper analyze the important factors of monetary policy of China internal and external transmission, according to China's current monetary policy framework. the authors guess: Both in internal and external transmission, regional effect of monetary policy are exist. Then, the authors provide an estimation of China's product of regional monetary base's input coefficient and regional monetary multiplier in 1986-2013 using regional monetary multiplier model of time-varying state-space model. Meanwhile, the regional policy monetary multiplier in 1986-2013 also is estimated using regional policy monetary multiplier model in same way. And get a conclusion: the effects of internal transmission of Monetary Policy in provinces and municipalities of eastern, central and western isdescending order. while the eastern gets strongest effects in external transmission,there is no significant differences between the central and the western. Moreover, the authors try to explain the existence of the regional effects. The result shows that the differences in the developed of the capital market, local government behavior and the degree of openness of economy are significant reasons for conducting the regional effects of internal and external transmission of monetary policy. In addition, except industrial structure, important reasons for conducting the regional effects of internal transmission of monetary policy also include: labor productivity and industrial enterprises property. Finally, on the basis of the conclusions of the empirical analysis,this paper puts forward relevant suggestions to resolve the regional effects of monetary policy in our country. we should improve monetary policy run economic and financial environment in 31 provinces and municipalities. In addition, monetary policy, under the premise of unity, should also consider using differentiated instruments of monetary policy. Meanwhile, with maintaining its own independence,the major regional branches of the People's Bank of China should increase direct communication with local governments on financial management to strongly reinforce coordination and cooperation between monetary policy and fiscal policy,industrial policy, development strategy.