Analysis Of The Control Effect Of China's Quantitative And Price-Based Monetary Policy In The Period Of Economic New Normal

Since the new economy has entered the new normal,China's leverage ratio and asset price surging have become two prominent features in the process of economic development.In the early 90s of last century,Japan's asset price bubble burst and the 2008 financial crisis in the United States have alerted us profoundly:if we do not attach importance to the two major risk sources and constraints of leverage and asset prices,we will be able to see that It can pose a major threat to economic growth.Under the current macro-prudential framework,how to use monetary policy to deal with these two issues has become an important reference factor for the central bank to carry out monetary control.So,are the different types of monetary policies playing the same role in leverage and asset prices?If not,how should the central bank formulate policies to effectively regulate and control the two?This paper studies this.Firstly,based on the introduction of the background and significance of the research and the combing and analysis of the previous literature,this paper points out the research ideas and contents.Next,it gives a brief description of the new normal environment of China's economy,defines the concepts and connotations of monetary policy,leverage and asset price,then briefly introduces the operation practice of monetary policy and the fact that real estate prices and leverage rates are rising,and explains the role of monetary policy in leverage and asset prices.Secondly,the mechanism of the impact of quantitative and price monetary policy on leverage and asset prices is analyzed,which lays the foundation for the empirical test in the following chapter.The theoretical analysis of this paper includes four aspects:one is the mechanism of quantitative monetary policy on leverage,the other is the mechanism of price monetary policy on leverage,the third is the mechanism of quantitative monetary policy on asset prices,and the fourth is the mechanism of price monetary policy on asset prices.Both quantitative and price monetary policies have analyzed their possible effects on leverage and asset prices from the two operating directions of easing and tightening,both positive and negative.Based on the different characteristics of the two periods before and after the new normal,this paper uses the SVAR model to study the effects of quantitative and price-based monetary policies on leverage and asset prices respectively in the two periods before and after the new normal.Through the empirical process,the following conclusions are drawn:First,the impact of quantitative monetary policies on leverage is inconsistent in the two periods before and after the new normal.Features.In the former period,monetary policy played a positive role,and sufficient liquidity promoted leverage,while in the latter period,it showed a negative impact.On the contrary,tightening policy would increase leverage.Secondly,the impact of price-based monetary policy on leverage is inconsistent in the two periods.In the former period,price-based monetary policy played a positive role,loose monetary policy would promote leverage,while in the latter period,it played a negative role,but raising interest rates would further increase leverage.Thirdly,the impact of quantitative monetary policy on real estate prices is inconsistent in the two periods.In the former period,using quantitative monetary policy to increase money supply will push up house prices,but in the latter period,if the growth rate of money is slowed down,house prices will still rise.Fourthly,the impact of price-based monetary policy on real estate prices has maintained consistency in the two periods.When interest rates rise,it will restrain the rising trend of house prices.On the whole,the effect of monetary policy on leverage and asset prices is not significant in the period after the new normal economy.Finally,based on the above analysis process and conclusions,this paper puts forward the following policy recommendations.On the one hand,on the basis of maintaining the stability of monetary policy,quantitative monetary policy can be maintained moderately loose,while using price-based means to reduce interest rates,thus achieving the goal of steadily deleveraging.On the other hand,in the context of macro-prudence,quantitative monetary policy can be maintained with appropriate easing,while raising interest rates through moderately tight price channels to curb the rise of house prices.Under the new normal situation,we need to give full play to the advantages of quantitative and price-based monetary policies,and at the same time,they should cooperate with each other to achieve better monetary policy control effect.