Evaluation Of The Monetary Policy Effect Based On The Symbol-constrained SVAR Model

The development of the country's financial marketization is closely related to the monetary policy.Along with continuous advancement progress of interest rate liberalization reform,the external conditions of China's monetary policy have already possessed the basis of changing from quantitative regulation to price regulation.The change of monetary policy can't be achieved overnight.During the transformation and upgrading of monetary control methods in China,it is particularly important to grasp the delicate balance between "quantity" and "price" so as to maintain the stable development of macro-economy effectively.So we need to study the effect of quantitative and price-based monetary policy at the same time.Most of the existing studies only focus on the impact of single quantitative or price-based monetary policy.For this reason,this paper will select the growth rate of generalized money supply(M2),interbank lending rate,and GDP representing output level,and CPI which represent quantitative policy variables.In order to study the effect of monetary policy implementation,the SVAR model with symbolic constraints is constructed.The first part of the paper include: the introduction,which describes the research background and significance,the research progress at home and abroad,as well as the main contents and ideas of the study.Secondly,it introduces the connotation of monetary policy shocks,the VAR model and SVAR model of monetary policy shocks,and the identification of shocks.Thirdly,it analyses the transmission channels,target selection of monetary policy in China and the correlation between monetary policy and major economic variables at the present stage.The selection of variables,stability test,model setting,symbolic constraints and structural impact identification in the model are introduced.The effect of China's monetary policy based on the estimated results of the symbolic constrained SVAR model is evaluated,and the robustness of the model is analyzed and the results of different models are compared.Finally,the conclusions and suggestions of the paper are given.The model estimates show that when the money supply is declining and the interest rate is on the contrary upward trend,the impact of monetary policy will have a continuous negative impact on the domestic output level and the domestic inflation level in the short term,while the impact on GDP will have a long lag,which will reduce the regulatory effect of monetary policy.When comparing the results of the traditional model with those of the traditional model,we find that in the conclusion of the symbolic constrained SVAR model,the output level responds faster to the impact of tightening monetary policy,and the depth of response is also strengthened.Based on the theoretical and empirical analysis,this paper argues that the impact of monetary policy in China is lagging behind and pro-cyclical,so the monetary authorities should have a highly sensitive ability to distinguish the current Chinese economy and make timely and effective policy adjustments according to the trend of economic operation.When making policy adjustments,the government should not only accurately grasp the middle of the implementation of monetary policy.The relationship between the goal and the ultimate goal should pay more attention to the interaction between the intermediate goal and the ultimate goal in terms of time.We also need to grasp the interrelationship between the ultimate goal such as the level of consumer price and the rate of economic growth.