A Study Of Asymmetry Industrial Effects On China’s Monetary Policy

Since reform and opening up, China’s economy has made remarkable achievements. The monetary policy, as one of the central bank’s tool, have been playing more and more important role in smoothing economic fluctuation.The existing study of monetary policy also gradually transfer from the effectiveness of monetary policy to the asymmetric effects of monetary policy, and asymmetric effect can divided into three part:the direction and strength of asymmetric effect, asymmetric effect of regional and asymmetric effect of industry. The paper mainly studies the industrial asymmetric effects of monetary policy in our country. Therefore, the industrial asymmetric effects of monetary policy means that the implementation of unified monetary policy will have different effect toward different industries.First of all, China, as one of the transition power in the world,has many heterogeneity feature, for example, different part of China has distinctive industries, but facing the same monetary policy, its effect is bound to be discounted. Then, based on the literature review and theoretical analysis, we found that most of existence study’s methods in domestic and abroad of industries asymmetric of monetary policy is the method of linear, which cannot essentially to clarify the mechanism of the monetary policy’s asymmetry effect. Then, we study and summarize the different transmission path mechanism of monetary policy, and found out that the reason why there has industrial asymmetric effect is due to different industries have different characteristic. Therefore, in order to study the asymmetric effect, we exploit the model of panel threshold model. By studying the manufacturing sector in February 2003 to February 2013 monthly variable, we found out the three different characteristics, for which can have asymmetric effects, there are per capita capital, external dependency and asset-liability ratio. As a result of the different threshold size of these industry characteristics, the same monetary policy will produce asymmetric effects in industry output value. In the end, we put forward some suggestions about how to better formulating and implementing monetary policy to promote the development of the real economy, such as manufacturing sector.