Research On The Theory And Effectiveness Of China's Structural Monetary Policy Tools

Since China's economy entered the "New Normal ",Supply-side Structural Reform has become the main line of the working of government.In order to achieve the goal of economic structure adjustment and optimization of target under the premise of currency stability and realize accurate guidance of currency flow,PBOC has created structural monetary policy tools on the basis of the original monetary policy tools.As for China's structural monetary policy tools,the relevant theoretical and empirical studies are still relatively scarce and lack of systematicness.This paper attempts to enrich and improve the relevant theories of China's structural monetary policy tools and comprehensively verify their effectiveness.Firstly,this paper summarizes the conclusions and results of related research literature on structural monetary policy tools at home and abroad to clarify the purpose and significance of this writing.Subsequently,this paper reviews the existing structural monetary policy tools in China and analyzes the status quo.After that,this paper conducts a theoretical research of China's structural monetary policy tools from three aspects: the motivations of using structural monetary policy tools,the setting of monetary policy goal and the mechanisms of action.Then,this paper uses the vector autoregressive(VAR)model to test the effectiveness of the four major structural monetary policy tools(standing lending facility,medium-term lending facility,mortgage supplementary loan and targeted RRR cuts)from four dimensions(price effect,economic growth effect,structure effect and interest rate effect).Finally,this paper puts forward relevant policy recommendations based on the results of theoretical research and empirical tests.This paper finds that the structural monetary policy tool is the products of PBOC's specific requirements for monetary policy regulation under the specific economic and finance situation.It shoulders the responsibility of currency stability,economic growth,economic structural adjustment and policy transformation,and mainly works through incentive compatibility mechanism,interest rate transmission mechanism,credit enhancement mechanism and expectation and signal transmission mechanism.From the empirical results,in the short term,the structural monetary policy tools have achieved the three major goals excluding promoting economic growth,and the effect of quantitative tools is stronger than that of price tools,but the effect is relatively limited in the long term.Therefore,during the application of structural monetary policy tools,we should pay more attention to the coordination with other policies,and strengthen policy guidance.In addition,the use of structural monetary policy tools is only a temporary measure for China.To truly solve the crux of the current economic development,China should vigorously develop direct financing and give full play to the role of market mechanisms.