Research On The Spillover Effect Of China's Monetary Policy On The United States

Economic globalization and integration is the basic trend of world economic development.In recent years,with the rapid development of China's economy,China's foreign trade has gradually increased.In 2014,China was the second largest trading partner of the United States,the third largest export market and the largest source of imports.In 2015,the United States of China goods totaled more than America to Canada's total trade of goods for the first time,the US trade deficit China to the highest level in history,the main reason is that imports hit a record high.China has become the largest trading partner of the United States has a very important significance,indicating that China and the United States economic and trade relations have developed into a new stage.This also shows that in the context of economic globalization,a country's monetary policy will not only play a role in the domestic economic variables,but also on the impact of his domestic.In recent years,most of the studies on the spillover effects of monetary policy mainly focus on the United States as the core to study the spillover effects of the United States to other developing countries and European countries.But with China becoming the largest trading partner of the United States and the important position in the global economy,it is very meaningful to study the spillover effects of China's monetary policy on the United States.Under this background,this paper designs a new Keynes two open economy DSGE model,the model consists of three departments,family firms,monetary authorities,the system equation of logarithm linearization by equilibrium equation,the parameter calibration of the model and the Bias method combined with dynamic parameters estimation is used to estimate the monetary authorities,using 2 kinds of monetary rules that is an interest rate rule,the other is a money supply rule,respectively in two kinds of monetary rules,an empirical research on the spillover effect of China's monetary policy in the United States,and the spillover effect of conduction for dynamic analysis,and by comparison,the current economic situation in our country is most suitable for China's monetary policy.The empirical results show that:(1)in the case of the extended Taylor rule,China's interest rate cut will lead to the rise of China's output,household consumption,price level,inflation.At the same time,the United States caused by the decline in interest rates,inflation,exports,the decline in total output,household consumption,imports increased.(2)in the case of an expanding money supply rule,the increase in the supply of money in China leads to the increase in output,consumption,inflation,and the decline in interest rates.At the same time,the U.S.interest rate,inflation,household consumption,imports increased,the United States exports,total output reduction.(3)the direction of monetary policy spillover Chinese two currencies under the rules of the U.S.economy variables are the same,are basically the same,but there are still differences in the size of the Chinese overflow,the increase in money supply leads to a decline in interest rates on U.S.interest rates is obviously greater than the overflow directly down to US interest rates in case of overflow rate,output,inflation in the United States,the United States of America family labor supply in the money supply under the rules are greater than in the interest rate under the rules of overflow.(4)the smoothness of the interest rate policy Chinese stronger,and China money supply policy was not as good as the smoothness of the interest rate policy China,Chinese on inflation and output,the exchange rate of the degree of concern in the interest rate rule is far more than in the money supply under the rules of China inflation,output,exchange rate the degree of concern.China's current economic situation,the Taylor rule is still more suitable for China's current economic situation,the main objective of China's monetary policy is to stabilize prices and economic growth.