An Empirical Study On Spillover Effect Of Japan's QQE Policy On China

After the outbreak of the global financial crisis in 2008,the world's major economies suffered severe blows,including Japan.In response to the Japanese economic recession,increased unemployment and deflation,the Japanese government implemented a comprehensive monetary easing policy(CME)in October 2010 to promote Japan's economic growth.But this move has not effectively promoted the recovery of the Japanese economy.After the financial crisis broke out,countries around the world adopted different policies to improve the economic situation.Among them,the United States took the lead in expanding its central bank balance sheet to supplement liquidity by means of large-scale asset purchases.This measure is called the Quantitative Easing policy,or QE policy.Subsequently,the Eurozone,the United Kingdom and other countries and regions have also launched QE policies to repair the economic situation after the crisis,and Japan has joined them.In December2012,the Japanese government decided to implement a more liberal non-traditional monetary policy,introduce a “price stability target”,set the inflation target to 2%,and adopt “Open-Ended Asset Purchasing Method”(Open-Ended Asset Purchasing Method).In April 2013,the new Bank of Japan Governor,Kuroda,officially defined the asset purchase measure as “Quantitative and Qualitative Easing”.After the implementation of the QQE policy,the Japanese government revised it several times.The introduction of the Negative Interest Rate Policy(NIRP)and the Yield Curve Control Policy(YCC)has made Japan's QQE policy closer to the actual situation of the country and become an independent,systematic non-traditional monetary policy.In July 2018,the Bank of Japan once again introduced the transmission mechanism of the forward-looking guidance into QQE and extended the target period of QQE to 2020.Therefore,QQE's research helps to analyze the effectiveness of non-traditional monetary policy and the spillover effects of monetary policy in the future.In May 2019,the Sino-US trade war officially started.As the world's top two economies,Sino-US economic and trade friction has attracted the attention of all countries in the world,and Japan is among them.As the fourth largest economy in China's trade,Japan's trade frictions may make China-Japan close.Therefore,the formulation of Japanese policies will have a greater impact on China's macro economy.The QQE policy has an important position in Japan's currentmacroeconomic policy framework.After the Sino-US economic and trade friction,there will be closer financial and trade links between Japan and China.Therefore,the analysis of the spillover effects of quantitative easing policy is for China.Macroeconomic fluctuations and the formulation of China's monetary policy are of paramount importance.This paper uses the VAR model to study the spillover effect of Japan's QQE policy on China's economy.The VAR(2)model is established by taking the Japanese base currency,China's output gap value,inflation rate gap value,China-Japan effective exchange rate and Shanghai Stock Index as variables.Give a positive impact on the Japanese base currency,and use the generalized pulse method to obtain an impulse response function graph of China's macroscopic indicators and analyze them.The study found that the spillover effect of Japan's QQE policy on China is mainly reflected in three aspects:(1)The two-stage QQE policy provides Japan with sufficient liquidity and,to a certain extent,increases China's external demand;The Japanese QQE policy has brought a certain degree of inflationary pressure on the Chinese economy,mainly reflected in the industrial enterprise level;(3)Japan's QQE policy has raised the yen/renminbi exchange rate and promoted Japanese exports,which in turn affected China's international trade situation..Therefore,China should pay more attention to formulating corresponding measures based on the policies of other countries to ensure the independence and effectiveness of its policies.