Study On The Selection Of The Media-target Of Monetary Policy In China

Many domestic and foreign scholars have been making themselves to solve the problem how to select a country' s media-target of monetary policy for a long time . In China, money supply has been taken formally as Intermediate Targets of Monetary Policy since 1996, and it has been worked well as an indicator of monetary policy in the last ten years. However, along with the improving of the degree opening of economy, financial innovation day and month, the deepening of marketalization innovation and other effects in our country, the shortage of taking money supply as intermediate targets has become more and more obvious. The main manifestations are the endogeneity on money supply, the instability of currency needs and the decreasing of controllability on money supply. While due to achieving much in economy and financial reformation and marketalization of interest rate, the interest has played more and more important role in the economy. The environment is becoming more suitable for interest to act as media-target. In the long run, it is a general trend to take interest other than money supply as media-target in China.This paper is divided into six chapters altogether. The first and second chapter introduces the significance and basic theories of the media-target of monetary policy. Then I will integrate theoretic analysis with the actual situation of our country to analyze and compare money supply to interest so that try to find a proper variable that can be taken as the media-target of monetary policy in China in the third, fourth and fifth chapter. As a result, monetary policy can be got better effect to promote the economy to develop more quickly and healthy. The last chapter is conclusion.