Research On The Effectiveness Of Monetary Policy Under The Economic Policy Uncertainty And Expectation Shocks

From 1949 to 2020,China has gone through magnificent 70 years,and the economy status has steadily increased.As the main means of macroeconomic regulation,China's monetary policy also has a tortuous development process.Monetary policy can achieve phased goals through the specific transmission channels;it has always been an important means for policy authorities to regulate macroeconomics.Without a doubt,different economic states require different monetary policy coordination.Some states require the “elasticity switching” of monetary policy,and some states require the quantitative or priced selection of monetary policy.China's monetary policy has a diversified trait,but at least it includes two major goals: economic growth and price stability.From the macroeconomic regulation experience,China's monetary policy regulation instruments and the orientation choices have been more successful which basically achieves the macroeconomic phased goals.However,the time-varying characteristics of economic system have become more and more obvious under the new situation,internal and external shocks have become more complicated.Economic policy uncertainty has increased significantly,and higher requirements have been placed on the effectiveness and forward-looking of monetary policy.Regarding the effectiveness of monetary policy regulation,some consensus has been reached.Most researchers believe that priced or quantitative instruments have certain macroeconomic effects,but under different development stages and policy objectives,the regulation effects of monetary policy are different.From Friedman's quantitative rules to McCallum's quantitative rules to Taylor's priced rules,although the form and connotation of policy rules have been gradually improved,there is still no unified understanding.The macroeconomic effects and instruments choice of ruled monetary policy are studied from a dynamic perspective,which helps to explore the causes of monetary policy effectiveness disputes,improves the regulating framework of China's monetary policy.Considering the time-varying characteristics of the economic system,the lag effects of economic policy uncertainty,the heterogeneous expectations of behavior main body,random fluctuations of impulse functions and other key point practical problems,the thinking path of this paper is follows as “submit questions ? analyses questions? question extensions ? solve problems”.It analyzes macroeconomic regulation effectiveness of monetary policy under different circumstances through VAR,MS-AR,MF-VAR,TVP-VAR,SV-TVP-FAVAR and DSGE model.According to the research ideas and content framework,the main chapters are set as follows:Theoretical Basis: Chapter 1 and Chapter 2.It includes topic meaning,academic progress,and main ideas,research methods and innovations.Specifically,this paper first introduces the background and significance,and then follows the “monetary policy effectiveness ?economic policy uncertainty and monetary policy effectiveness ? expectation management and monetary policy effectiveness”,combing the classic literature,highlighting analytical perspective and the necessity of the literature review,expounding the research ideas,main contents and major innovations.Based on the three aspects of benchmark analysis(the effectiveness of monetary policy),comparative analysis(how economic policy uncertainty affects the effectiveness of monetary policy macroeconomic regulation)and comparative analysis of reverse regulation(the effect of the way expectation management countercyclical regulating the economic policy uncertainty on the monetary policy effectiveness),the paper gives the core theoretical basis.In conclusion,Chapter 1 and Chapter 2 aim to lay the foundation for the following chapters of empirical analysis and econometric test.Empirical Analysis: Chapter 3,Chapter 4,and Chapter 5.The empirical analysis mainly answers questions such as the relationship between monetary policy and macroeconomics,the relationship between economic policy uncertainty and macroeconomics,and the effectiveness of monetary policy macroeconomic regulation and preliminary analyzes whether economic policy uncertainty has weakened effects of monetary policy.Chapter 3 is the preparation of the macroeconomic effect analysis of monetary policy.Test method for Granger causality in same frequency and Granger causality in mixed frequency are used to test the causal relationship between monetary policy,economic policy uncertainty and macroeconomic variables.Chapter 4 is the benchmark analysis.Without considering economic policy uncertainty,TVP-VAR model is used to analyze macroeconomic effects of monetary policy.The effects of monetary policy are observed at different stages.Chapter 5 is the contrastive analysis.Firstly,economic policy uncertainty is divided into stages,and the stage characteristics are summarized.Based on SV-TVP-FAVAR model,three-dimensional pulse,total pulse,phased pulse and zonal pulse analysis are performed on the macroeconomic effects of quantitative and priced instruments to analyze the influence of economic policy uncertainty on the monetary policy effectiveness and weakening strength on the monetary policy effectiveness at different stage.Econometric Test: Chapter 6 and Chapter 7.This part is an important chapter.It mainly demonstrates whether expectation management can counter-cyclically regulate weakening effects of monetary policy.Is there an “additive effect” or “offset effect” between monetary policy expectations and technological progress expectations? Specifically,DSGE model is used to investigate the effectiveness of monetary policy(without expectation situation,monetary policy expectation situation,double expectation situation of “monetary policy and technological progress”).The main evaluation indicators are shock extreme value,regulation range,response period,short-term effect,stage effect and long-term effect.Conclusion,Implication and Outlook: This chapter mainly summarizes theoretical foundations,empirical analysis and econometric test.It puts forward the research deficiency and corresponding academic prospects based on the existing research and conclusions.Research deficiency and academic prospects involves the dilemma of monetary policy multiple objectives,the lack of economic policies coordination,and insufficient consideration of development quality.This paper analyzes the effectiveness of monetary policy under the economic policy uncertainty and expectation shocks through VAR and extended models,DSGE and extended models based on the economic reality of economic policy uncertainty and heterogeneous expectations.The contents and analysis conclusions have important reference value for building a monetary policy framework system in the new situation.