Research On The Monetary Policy Transition In China

As the widely-used macroeconomic regulation policy,monetary policy plays a very important role in maintaining the stability of the capital market and promoting the healthy development of the national economy.Monetary policy can be distinguished: quantitative and price monetary policy in accordance with different policy tools,mediation objectives and transmission mechanism.The macroeconomic background is different in economic period,and different types of monetary policy have different regulatory effects.Therefore,the choice of monetary policy adjustment tools should be compatible with the macroeconomic environment.Nowadays,China's economy is in a critical transition period.There have come into being many new situations in today's macroeconomic environment,compared to that in the past.At present,China's foreign trade surplus continues to expand,which leads to the substantial growth of foreign exchange reserves and the serious excess of liquidity.With the increasing development of the scale of shadow banking in the financial sector and financial disintermediation,changes have been made in the economic environment when implementing the monetary policy.Therefore,it is of great importance to explore the effectiveness of regulation of China's monetary policy and the necessity of the transformation of China's monetary policy.This paper analyses the transmission mechanism effectiveness of quantitative monetary policy and price monetary policy in the current macro economic environment and regulation effect of these two kinds policy in the actual economic development regulation from the aspects of theory.The measurability and controllability of quantitative monetary policy intermediary target for monetary supply is decreasing due to the improving financial market and other factors.So its effect is limited and the development and financial innovation of the interest rate market is growing and the function of interest,the representative price monetary policy tool,is increasing.This paper further analyses actual function of two kinds of monetary policy on the economy adjustment from empirical instances,and constructs the vector auto regression model and the analysis impulse response and variance decomposition.Then it is found that the function of interest rate tool control is better than the statutory deposit reserve rate regulation according to the comparative analysis of the effect of the deposit reserve rate and interest rate tool tools,which is often used in our country in controlling money supply,in restraining inflation control and promoting the effect of monetary policy in three aspects of economic growth.However,because China's interest rate liberalization has not yet been complete,the benchmark interest rate system is imperfect,the capital account is not fully liberalized,and the investment and financing system have a lot of constraints,China's monetary policy transformation process faces many difficulties.In view of the difficulties encountered in the process,this paper puts forward some measures and suggestions for the transformation of China's monetary policy.The paper analyses the transformation of China's monetary policy analysis and find out the necessity of transition from two aspects of theoretical and empirical.The result has theoretical and practical significance for the successful transformation in view of the current macroeconomic environment of China's monetary policy implementation.