Research On The Modes Of China's Monetary Policy Regulation Under Open Conditionsa

The choice of monetary policy control methods has always been between the quantitative and price types.This paper takes the exchange rate fluctuations into consideration,studies its influence on the choice of China's monetary policy,and further explores what kind of the mode of monetary policy regulation is more applicable to the current situation in China.The time span selected in this paper covers the reform of the exchange rate formation mechanism in 2005 and the improvement of the quotation mechanism of the RMB exchange rate in 2015.The frequent fluctuations in the exchange rate make the exchange rate factor an important variable that the monetary authorities should pay attention to during the macroeconomic regulation and control process.The research method of this paper is from the perspective of both static and dynamic,using the monthly macro data from June 2005 to September 2018,to take exploration and analysis based on the constructed monetary policy response function.In the static analysis,the GMM method is used for preliminary estimation.The exchange rate expansion items are added to the traditional quantitative and price monetary policy response functions,and the changes and effects before and after the exchange rate factors are added are compared.At the same time,the two reaction functions of the exchange rate factor are further expanded,and a policy response function combining the two kinds of price of the "quantity main price auxiliary" type and the "price main quantity auxiliary" type is constructed to conduct a new round of comparison.In the dynamic analysis,the Markov regional conversion model is first used to explore the differences between the different district systems in the quantitative type,"quantity main price auxiliary" type,price type and "price main quantity auxiliary" type monetary policy adjustment methods.Then construct the state space model to further explore the time-varying situation of the influence factors of the monetary policy intermediate variables among the various macro-variables.The empirical results show that the quantitative and "quantity main price auxiliary"monetary policy response functions have continuity in this time span,while the price type and "price main quantity auxiliary" monetary policy response functions have obvious structural breakpoints.Within different district systems,the estimated parameters of each macro variable in different monetary policy response functions behave differently,that is,the variables that the monetary authorities focus on are different.From the horizontal comparison between the single-type control methods and the vertical comparison between the single-type and mixed-type control methods,it is found that the reaction coefficients of the variables in the quantitative model are larger than the reaction coefficients of the variables in the price-based model,and the "quantity main price auxiliary" model estimation results are more significant than the single price type and "price main quantity auxiliary"model,indicating that China's interest rate liberalization is in the acceleration stage,and currently China's direction of monetary policy regulation is gradually moving closer to price,but for the moment,the regulation of macroeconomics is still inseparable from the role of quantitative monetary policy.The time-varying results of the estimation of the parameters of each macro variable in the state space model show that under the quantitative and "quantity main price auxiliary" monetary policy adjustment methods,the dynamic effect of exchange rate changes on the growth rate of money supply is significant But in the price type as well as the "price main quantity auxiliary" monetary policy adjustment method,the dynamic impact of exchange rate fluctuation on interest rate is not significant,which is further explained that in the open economic environment,quantitative regulation is still the main means for the current monetary authorities to regulate monetary policy.However,compared with the single quantitative regulation,the hybrid type of monetary policy,which is dominated by the money supply,pays attention to exchange rate fluctuations,and at the same time,it also takes traditional targets into account such as inflation and output.It can be considered that the current quantitative control still plays a role,but from the actual situation of China and the future development,the price-oriented monetary policy regulation should be the main development direction of China's monetary policy operation.