Analysis The Long-term Effects Of Monetary Policy Impact On Stock Market

In 2015, the stock market experienced by the crash rose fell to mad cow. During this period, central bank of China has repeatedly used monetary policy to increase liquidity in the market, which greatly stimulated the stock market. So it has practical significance to study the impacts and the characteristic of each variable, help answer the question of whether monetary policy have effect to the volatility of the stock market fluctuation or not, the unique characteristics and which tool of monetary policy is the main factor of stock price index rose and so on.This paper reviewed the existing domestic and foreign literature. Firstly, combed the research results about whether the monetary policy have real impact to stock market, the results show that the answer is yes; secondly studies abroad mostly discuss this issue through the money supply and interest rates, so this article summary the study of foreign scholars from these two chapter;third, domestic literature are more comprehensive than multiple variables, so I do not subdivide the study of domestic scholars. Correlative literature reflect that the interest rate factors, legal deposit-reserve ratio, money supply, macro-economic and other intermediaries are the most important influence elements, while the summary of the research results can be reflected that the vector autoregressive model be appreciated by many scholars, due to high stability and effective conclusion.This article analyze monetary policy have influence on the stock market impact from three main lines belong related literature. The first main line revolves around money demand theory; like the Fisher equation, equations and Cambridge Keynesian money demand, proof that monetary policy will directly affect the stock price; the second is the main monetary policy will first be transmitted to the stock market price, interest rates will affect the stock price through the stock’s intrinsic value formula have an impact on the stock price, money creation model indicating that the statutory deposit reserve ratio will affect stock prices, money supply through a direct way affect the stock market money supply and influence interest rates, inflation indirectly have an impact on stock prices; the third is the monetary policy stock price transmission mechanism, detail stock price transmission to the overall economic effect of investment by Tobin index, the balance sheet effect, wealth effect, mobility channels, the impact of total output.In the empirical analysis, select the 2006.01—2016.01 monthly data, to analyze data using Eviews8.0 software measurement model. The first step is to set up a model,collecting and processing the data according to the equation; the second step is have unit root test on the time series data, results show that HS300 index is a stationary sequence, and the other variables are 1 order single integer sequences. The data is a time series, proved that the third step can be carried on; third step through the co-integration test to compare the rationality of the Vector Auto-regression model and error correction model, it eventually determine the vector autoregressive model is more suitable for research in this paper, which is the innovation of this paper; the fourth step selection vector auto-regression model of deposit rates, lending rates, deposit reserve ratio change impact on the stock market, and the results of the regression unit root test results show that all the roots are in the inner circle, the regression results are valid; fifth step is generalized impulse response analysis and variance decomposition analysis,this is done to test VAR models, motion charts shape also makes the results more intuitive.The results of this part are: the impact of interest rate、the statutory deposit reserve ratio impact is negative, in which the effectiveness of interest rate shock is greater than the statutory deposit reserve ratio, and the loan interest rate is greater than the effect of deposit rate, and performance a time delay of 1-4,while the negative effects of statutory deposit reserve ratio is clear, there is no time delay; there is a positive correlation between money supply and stock prices, money supply is the weakest role in less than 1% and has long-term nature.Finally, on the basis of summarizing the related research conclusion, we put forward policy suggestions from aspects of certain monetary policy action, focus on adjusting the interest rate index, accelerate reform of interest marketization, increase policy transparency, stable expectations and perfecting the policy coordination mechanism.