The Research On The Effectiveness Of Monetary Policy Interest Rates Transmission Mechanism In China

Monetary policy transmission mechanism is the center of monetary economics research. The channel of monetary policy transmission mechanism directly influences the ultimate goal of monetary policy. Among all transmission mechanisms, the interest mechanism is the most essential and basic. With the rapid development of China's financial market and activities securitization and economic globalization, interest rates play more and more important role in macroeconomic regulation and have become a key factor for the monetary policy transmission to the entity economy. Therefore, the research on the effectiveness of monetary policy interest rates transmission mechanism in China can help us find the factors hampering the efficiency and provide theoretical basis to improve the effectiveness of monetary policy.At present, many scholars study whether official interest rates'or market interest rates'channels and qualitative research more than quantitative. This paper uses VAR model, Granger Causality Test, Impulse Response Analysis and Variance Decomposition and Cointegration Test, VEC model to compare the official interest rates channel with the market interest rate channel. And the conclusion is that the forward conduction effect in both official and market interest rates exists certain rigidity. The effect of both market and official interest rate to consumption exists and has certain lagging. The elasticity of investment and consumption to both interest rates is low. The effect of market interest rates to investment is higher than official interest rates and the effect of investment to output is higher than consumption. And with the above conclusions as a starting point, we analyze the factors restricting the efficiency of transmission mechanism and give policy recommendations.