A Comparative Analysis Of China's Monetary Policy Tools Under The New Normal Background

Since China's reform and opening up,GDP's annual growth rate before 2007 is constantly refresh.By the end of 2010,China became the second world's largest economic entity.Experienced rapid economic growth,China's economic growth in the past two years began to slow down,scholars call the phenomenon of China's "new normal" period.China's economic slowdown in the pace of rapid growth,it is the rapid growth in the accumulation of problems and drawbacks highlighted.Urgent need to adjust and upgrade the industrial structure,increasing the difficulty of reform.Monetary policy has become an effective means of macroeconomic regulation.Monetary policy tools are used by the central bank to achieve the objectives of monetary policy.In this paper,we study the quantitative and price based monetary policy instruments under the new normal,in order to find a suitable monetary policy tool.In this paper,based on the theory of monetary policy,combined with China's current monetary environment under the new normal,analyze the use of monetary policy tools and the transmission channels.In the empirical analysis of the choice of the new normal monthly data during 2010-2016 years in the broad money supply in M2 and the overnight Shibor of R as the representative of operation tools in quantity and price based monetary policy,the empirical analysis of GDP and CPI established the VAR model analysis found that both have long relationship with GDP and CPI.From the impulse response function of GDP and CPI on the relationship between the impact from M2 positive changes lasting,and showed the lasting negative relationship to the change from the impact of the R,which is consistent with the theory,described in two tools under the new normal are both effective.As for the comparison of the two monetary policy tools,the quantitative monetary policy toolsare superior in the control level and the price tools is more significant.To analyse the effect of monetary policy on the time dimension of quantity and price,choose the same sample in 2001-2007 to establish the VAR model analysis,longitudinal comparison of quantitative monetary policy tools the effect diminishes with time and price based monetary policy increases with time.At the end of this paper analyzes some problems at present in our country both the quantity and price based monetary policy instruments are combined with the "new normal" regulation that stable background in quantity and price based monetary policy instruments will coexist in the future for a long period of time.Therefore,it is necessary not only to steadily push forward the marketization of interest rates,but also to optimize the existing monetary policy instruments and expand the caliber of the money supply.