An Empirical Research On Monetary Policy Intermediary Goals: Based On VAR Model

Monetary policy, which is considered to be one crucial part of macro economy, includes all strategy and measure that central banks takes on to control economy and reach the ultimate goal of currency value stabilization and economy development. Monetary Policy Intermediary Goals is not only a theory problem but need to be concluded from the fact. There are many researches about Monetary Policy Intermediary Goals in money theories. The professors use new methods and models to in the researches these years. With the adjustment in our economy, the central bank adopts different monetary policy intermediary goals. Therefore, the research of monetary policy targeting intermediaries, have important practical significance.The effectiveness of monetary policy depends on perfect monetary policy transmission mechanism, the central bank use various monetary policy tools, directly or indirectly regulate financial institutions reserves and the financing conditions for the financial markets, thereby control the entire money supply and credit total, and the enterprises and residents constantly adjust their economic behavior that make the national economy to achieve a new balance. Because monetary policy is not direct role in the ultimate goal, there is a complex process of conduction. Intermediate goal of the monetary policy is a very important process control variables which relate to the regulation of effectiveness and the realization of the ultimate policy objective From the theories and practice of monetary policy transmission mechanism, it can be concluded that fulfillment of monetary policy transmission cannot be separated from entire social economical environment. Instead, the financial structure and market perfection degree determine channels and consequently effectiveness of monetary policy transmission. In other words, monetary policy transmission is a dynamic process, which varies in pace of one country's economy growth. So central banks are forced to adjust the choice of monetary policy intermediary goals accordingly. As China's financial market has constant improvement in recent years, the stock market and bond markets have significant development. New financial products have continually expand the money market and capital market channels for the flow of funds between the currency market and the capital market linkage more and more. At the same time, the traditional gradually reduce dependence on loans. Reform of the exchange rate system is more flexible, the interest rate sensitivity is also stepping up. All of the above has the financial structure changes will certainly affect the existing monetary policy transmission mechanism, accordingly, the monetary authorities in China are also adapting to the new economic situation, choose the appropriate monetary policy intermediate goals. Therefore, this paper focus on the ultimate goal and intermediate goals.In accordance with the steady and continuous development of China's economy, its financial structure is in the process of competence and optimization, and the marketization of our social economy gradually levels up. Under such circumstances, the central bank is requested to take effective and rational adjustment and control on the economy by way of monetary policy. And no matter in the course of monetary policy constitution or implement, the selection of monetary policy intermediary goals is the key point of carrying out monetary policy.Firstly, the paper narrows down the range of possible intermediary goals by way of retrospect of theories concerning monetary policy intermediary goals. Consequently, on conclusion and comparison of other scholars'academic results, this paper broadly selects all possible variables that may take on the character of monetary policy intermediary goals and sets the time length and frequency. And take empirical analysis on the samples using the technique of econometrical Vector Auto-Regression system, such as Granger Causality, impulse response and cointegration test method.And at the last part of the paper, based on the result of the empirical analysis and the specific reality of our nation, some research conclusions are reached. On the foundation of outcomes, certain policy advices are given on the selection of monetary policy intermediary goals.