| After the outbreak of the financial crisis in 2008,the topic whether monetary policy should interfere with asset prices and how it should react to asset price fluctuations has been debated.Although there is still a certain gap between the development of China's financial system and advanced Western economies,with the growth of China's economy,the accumulation of social wealth has stimulated the vitality of China's capital market.And with the deepening of economic globalization,foreign financial markets will bring new pressure on our country's asset price volatility.Besides,the impact of the current capital market on the real economy is getting deeper and deeper.Any capital market bubble will have a huge impact on the real economy.Therefore,whether asset price fluctuations should be included in the monetary policy formulation framework and how to react to asset price fluctuations better requires in-depth study.In this context,this paper conducts a study based on the following logical ideas by combining theoretical and empirical methods:Does asset price affect the real economy?How do the monetary policy intermediary targets react to and influence asset price fluctuations?First,the asset price is included in the monetary policy response function,and a macroeconomic analysis framework consisting of real economic variables,asset price variables,and monetary policy variables is established.The empirical evidence indicates that asset price fluctuations have a significant impact on the real economy.Therefore,asset price should be taken into consideration by the central bank.In addition,it is found that the intermediary targets of China's central bank monetary policy respond to asset price fluctuations in a corresponding manner,which is consistent with the expectation of the reaction function,that is reverse intervention.In addition,for the first time in the long-term and short-term perspectives,we use nonlinear models to study the asymmetrical response of monetary policy intermediate targets to asset prices.And we find that the intermediary targets will reversely interfere with stock price volatility in the long run,whether asset price bubble is formed and broken.In the short term,the money supply only responds to the decline in stock prices but not significantly to the rise.In the long term,the adverse reaction to rising house prices is stronger than decline.Due to the viscosity of housing supply and demand,the short-term effects of housing prices on intermediate targets are symmetrical.Because of the high degree of marketization,interest rates will always be subject to frequent fluctuations.In studying the asymmetric effects of the monetary policy intermediary target on asset prices,it has been found that the long-term positive and negative effects are symmetrical.In the short run,money supply can interfere with asset prices as expected.But in the short run,stock prices react more sharply to quantitative monetary tightening policies in the short term,and house prices respond to quantitative monetary expansion policies more quickly.Besides,interest rate is easy to produce J-curve effect and time-delay effect on asset price.There are some relevant policy recommendations.First of all,China's central bank should consider asset prices in monetary policies,and should use appropriate monetary policy intermediate targets to interfere with different assets.It is proposed that except the central bank should change interest rates to intervene the stock price bubble burst,all others should use money supply intervention.Finally,we must strengthen financial supervision,deepen financial reform,and promote efficient capital inflow into the real economy. |
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