The Theoretical Analysis And Empirical Research On The Regulation Mode Of Interest Rate Corridors In China

Since 1990 s,many countries of the world have gradually abandoned money supply and turned to implement interest rate as their intermediate objective of the monetary policy system.During or after this transformation many of the counties implement interest corridor mode.Statistics show that it enhanced the effect of the monetary policy and the stability of the market interest rate.In recent years,correlation between macro economy and money supply became not obvious in our country,we are facing the problem of transforming the intermediate objective of monetary policy into interest rate as well.Taking the international experience for reference,our central bank set up standing lending facility in 2013,and began to build the frame of our interest rate corridor.Therefore,it is very meaningful to study the relevant theories,operating mechanism and adaptability in our country of the interest rate corridor.And the study is very significant for our central bank to transform the intermediate target of monetary policy and improve the efficiency of monetary policy regulation.At first,the paper introduces the background and significance of the study,and reviews relevant literature of the domestic and foreign scholars on the transformation of monetary policy intermediary target and the interest rate corridor regulation mode.The research mentality and ideas are summarized from the existing research results.Then,the current situation of the implementation of interest rate corridor at home and abroad is introduced.In the second part,related concepts and theoretical basis of monetary policy,monetary policy intermediary target and interest rate corridor control mode are described.The mechanism,the advantages and the setting principled of interest rate corridor control mode are analyzed in detail.In the third part,based on time series data,the controllability and the correlation with macroeconomics of interest rate and money supply are compared by empirical analysis,through Johansen cointegration test and VAR model.Conclusion is drawn that interest rate is better than the money supply in the controllability and relevance to macroeconomics.Interest rate is more suitable to be monetary policy intermediary objective.Then the time series data is divided into two parts at the cut-off point that the time standing lending facility was established.Next,VAR model is established to measure the volatility variation of interest rate before and after the establishment of the standing lending facility,and to validate the applicability of the interest rate corridor in our country.The empirical results show that standing lending facility can play a role in reducing the volatility of interest rates and raising explanation level of interest rates to macroeconomic,when it act as the interest rate corridor ceiling.Our financial market is suitable for carrying out interest rate corridor control model.Finally,on the basis of the theoretical analysis and empirical analysis,some policy suggestions for implementing the control mode of interest rate corridor are put forward.First,perfect the system of standing lending facility tools.Second,complete and regulate the financial market transmission mechanism.Third,improve the electronic clearing system and improve the transparency of monetary policy.Fourth,accelerate the transformation speed of monetary policy intermediary objective from money supply to interest rates.