The Employment Effects Of Monetary Policy

The United States financial crisis severely affected China's export trade in 2007, resulted in a large number of business failures and the coastal unemployment, and with the expansion of university enrollment, the students employment problem have been the problem which the government must to solve in China's economic development. In this economic backdrop, we will study the monetary policy on employment growth.Firstly, we will study the theoretical of monetary policy, summarize the reasons for the effectiveness of monetary policy through domestic and international research on monetary policy and the employment of the literature review. Secondly, we will build monetary policy model, study the effects of monetary policy on employment from the perspective of empirical analysis. In this paper, data from 1980 to 2009, we will build a cointegration equation on the money supply, interest rates and invest, and we find the supply money in investment elasticity is 0.9031, the interest rate in investment elasticity is -0.2411. In the short term, the impact of interest rate changes on the positive effect of investment We build a cointegration equation on investment and employment, find the investment elasticity of 0.1136 on employment, and through the establishment of State Space Model, we find that the elasticity of investment on employment fluctuate between 0.8261 ~ 1.4418, with a downward trend.This paper argues that imperfect market economy, unsmooth credit channel of monetary policy and the irrational investment structure is the reason the employment effects of monetary policy is not obvious. Therefore, in order to improve the employment effects of monetary policy, we should promote interest rates continue to market-oriented reform, clear credit channel of monetary policy, improve the financial market system and adjust the investment structure.