Validation Research On Domestic Intermediate Objective Of Monetary Policy Under Financial Disintermediation

The selection of monetary policy intermediate objective is an important part in monetary policy operation while the validity of intermediate objective acts as a significant bond of successful monetary policy transmission.In this circumstance,the selection of intermediate objective has to take measurability,controllability and correlation standards as well as the adaptability to national economic and financial system into consideration.Since the 21st century,domestic capital market has entered into a rapid development stage,greatly pushing forward tremendous changes in domestic financial market and financial structure with continuous advancement in interest rate marketization.For instance,the increase of direct financing percentage and the decrease of indirect financing percentage in total social financing,the diversification of corporate financing channels and the innovation of financial instruments.All of these changes bring about financial disintermediation for the asset side and liability side in financial institutions such as banks.In light of the significant influence of financial disintermediation on domestic intermediate objective,namely money supply validity,it is practical to investigate the variation of domestic monetary policy intermediate objective under financial disintermediation.Based on above research background,this thesis adopts a research approach which combines theory with practice and qualitativeness with quantitativeness to primarily introduce relevant monetary policy theories and domestic financial disintermediation developing condition.Subsequently,it conducts an analysis on the impacts of financial disintermediation on monetary policy intermediate objective validity.According to theoretical analysis,there are apparent changes in the measurability,controllability and correlation of money supply caused by financial disintermediation.By reference to the measurement of financial disintermediation indexes,this thesis further divides research range into two sections,namelyDecember 1999-December 2004(slow disintermediation stage)and January 2005-December 2015(rapid disintermediation stage).Through VAR model,it successively carries on an empirical observation on the controllability and correlation of money supply under two disintermediation conditions.As proved by the empirical experiment,there exists a co-integration relationship between total required reserves,monetary base,money market rate and money supply.At the same time,with the deepening of financial disintermediation,the functions of reserve fund and monetary base are declining while that of money market rate is ascending.Moreover,there also exists a co-integration relationship between money supply and economic growth as well as price level and with the deepening of financial disintermediation,the influence of money supply on economic growth and price level shall simultaneously decrease,which proves changed controllability and weakened correlation of money supply under financial disintermediation.In the end,pursuant to the conclusions derived from theoretical and empirical analysis,this thesis puts forward the suggestion that China shall still utilize money supply as the intermediate objective at present with a gradual emphasis on interest rate targeted at the selection of monetary policy intermediate objective.In the meanwhile,monetary authority shall create an environment in favor of interest rate transmission function,monetary statistics caliber transformation,concurrent index supervision and intermediate objective validity improvement.