The Implementation Of China's Monetary Policy In The New Normal Economy

After the 2008 financial crisis,the economic and financial stabilitieshave become the focus of macroeconomic policies,strengthen the dominant position of monetary policy is the best choice when facing complex macroeconomic situation.As China's macroeconomic development into the "new normal",to further improve the monetary policy tool is now facing an important task.Modern macroeconomic theory and policy practices in different countries have shown that monetary policy is the most flexible and effective macroeconomic policy approach to cope with the gap between output gap and price level.Fiscal policy is affected by the political cycle and the inherent long delay and other factors,in the regular period to stabilize the price level and the effect of output gap is far less than monetary policy.With China macroeconomy stepping into the new normal,further improving the monetary policy tools is an important task for government andcentral bank.The purpose of this paper is to discuss the objectives and tools of China's monetary policy under the new normal background,and get the corresponding conclusion and policy enlightenment.Chapter 1 is the theoretical basis and literature review.Chapter 1 analyzes relevant concepts,reviews the monetary policy theory of monetary policy implementation and related research carried out academic history comb.Chapter 2 analyzes the dilemma faced by the implementation of conventional monetary policy under the new normal state and the space reserved for the implementation of unconventional monetary policy."New normal",the structure of the conversion squeeze the implementation of conventional monetary policy space.After entering the economic "new normal",the conditions for the implementation of China's monetary policy have undergone significant changes: first,the economic growth rate stabilized,the unemployment rate is stable,there is no need for strong stimulus;secondly,the balance of payments surplus narrowed,accounting for The proportion of medium-level intermediary with the inflation and economic growth is significantly weakened,the number of control methods gradually failed;Finally,the internationalization of the RMB stability,the number of foreign exchange reserves,The impact of the RMB exchange rate in the implementation of monetary policy is growing.The empirical analysis shows that the effect of traditional monetary policy under the "new normal" is short and limited,and it is difficult to complete the task of "steady growth and structural adjustment" by relying on traditional monetary policy.Through the construction of the central bank qualified collateral system,the steady progress of interest rate marketization and the ongoing innovation of monetary policy tools,reform for the implementation of unconventional monetary policy left room.Chapter 3 exploits the new framework of China's monetary policy implementation under the "new normal".In terms of policy objectives,the People's Bank,like other central banks that set multiple target systems,to achieve price stability,economic growth,full employment and balance of payments as the basic objective;subprime mortgage crisis,reduce financial friction,maintain financial stability and To achieve economic restructuring.Traditionally,the People's Bank of China has used the open market operation to regulate the supply of money market funds,adjust the reversal of the base currency caused by the change of foreign exchange reserves through deposit reserve adjustment,and guide the flow of credit funds through central bank loans and carry out macro-control through interest rate policy adjustment.Under the new norm,the decision-making logic of China's monetary policy has been changed from "traditional adjustment deposit reserve ratio hedge foreign exchange" to "steady growth through structural tools".In terms of the guiding mechanism,the dominance of bank credit determines the particularity of China's monetary policy transmission(the interest rate is not completely liberalized,the bond market development lags behind the economic development).With the advance of financial reform,the interest rate channel Will be stronger,and the "soft budget constraint" of the local government financing platform may affect the effectiveness of the credit channel,and the low transparency weakened the effectiveness of the expected channel.Chapter 4 analyzes the "directional operation" as a suboptimal choice under the "new normal" multi-objective monetary policy."Directional easing" to strengthen the central bank control,making the industry a high degree of credit policy differentiation,and there is a substitute for the trend of fiscal policy,transparency is lower,the signal transmission effect is not strong,and may leave some sequelae.DSGE model analysis shows that the directional easing policy is consistent with the direction and impact direction of the macroeconomic variables,whether it is directed open market operation or directional rate cut operation.In the short term,the long term interest rate drop and the term premium increase,the output level And the rise in inflation;in the long run,after a long time lag,the effect of "directional easing" gradually disappears;among them,the directional open market operation to play the effect of a shorter time,and the rate of interest rate policy longer;The difference between the "directional easing" policy of the type is mainly reflected in the different degree of influence on the variable,the effect of the directional rate cut is much stronger than that of the directional open market operation.Therefore,the "directional rate cut" can become a "new normal" under the more emphasis on the flexibility of structural policy tools.Chapter 5 summarizes the international experience of monetary policy implementation.This paper mainly analyzes the basic rules and development experience of the monetary policy of developed economies in Europe and America and discusses its reference value to the implementation of China's monetary policy under the "new normal".From the Bank of England's monetary policy practice,it should further strengthen the status of the Monetary Policy Committee,while attaching to the formation of financial markets to form a reasonable expectation of monetary policy;from the Fed's monetary policy practice,should guide inflation expectations to meet monetary policy,And can take unconventional monetary policy to deal with the financial crisis;from the European Central Bank's policy practice,should further improve the interest rate control mechanism,and increase monetary policy transparency.Chapter 6 explores the implementation of China's monetary policy under the "new normal".First of all,it explores whether the inflation target system is established in China and how far away from the implementation of the inflation target system in China.Secondly,the prospect of monetary policy tools from quantitative to price change is discussed.The paper analyzes the types and characteristics of interest rate and exchange rate tools in the existing price-based policy instruments,and analyzes the innovation of six kinds of monetary policy tools in China.In closing,this chapter analyzes the problems of constructing short-term interest rate corridors and medium-term interest rate guidelines,Normal "under the interest rate management effectiveness.In order to improve the effectiveness of the implementation of monetary policy under the “new normal” the People's Bank of China should make more use of price-based tools to focus on the expected guidance and strengthen macro-prudential management in order to better play the role of monetary policy in macroeconomic regulation.First of all,speeding up the transition of monetary policy implementation from quantitative control to price control will effectively enhance the marketization of monetary policy under the control of monetary policy efficiency.Second,the expected management of the current international has become the core means to improve the effectiveness of monetary policy.Finally,monetary policy should be strengthened with macro-prudential policy.Macro-prudential policy can reduce the excessive risk-taking incentives of the financial system by adjusting the liquidity,capital and leverage of banks,thus effectively inhibiting the formation of asset bubbles.13 th Five-Year Plan has put forward the "monetary policy and prudent management to establish a coordinated financial management system," the perfect direction,the future should focus on resolving the macro-prudential framework and micro-financial regulatory system,as well as in advance,After the rescue mechanism how to combine and other specific issues.