The Time Lag And Choice Of Intermediate Target Of Monetary Policy In China

With initially established the functioning framework for China's market economy system, the way of macro-economic control also has the relevant change, which is mainly indirect control of macro-control pattern formation of monetary policy, so monetary policy is playing more and more important role in the macroeconomic regulation and control. It depends on several reasons to achieve the desired target of monetary policy's implementation. One of the major reasons for the effects of monetary policy is"Time Lag". In reality, the policy's effect actually cannot appear immediately, because it is present a period of time interval that is the time lag of monetary policy. Time lag often changes, so its present increases the risk of monetary policy macro control. It becomes more difficult for Central Bank to do the suitable test promptly to monetary policy. Therefore, the research of monetary policy time lag could contribute to the theoretical reference of monetary policy efficiency. Meanwhile, at China's transition, how to realize and grasp the outside time lag in effect of monetary policy, and how to choose appropriate intermediate target to monitor the impact of the implementation of monetary policy, for improving the efficiency of policy, macro-economic control, keeping price stability and promoting economic development has an important practical significance.From macro point of view, this paper uses two important conduction channel of monetary policy---monetary channel and credit channel to do the experienced analysis of time lag in effect of monetary policy. It takes narrow sense of monetary supply M1, market interest rate R, credit scale Loan and others as variable to build VAR model to explain economic output and prices, gains the total economic output impulse response function caused by monetary policy of adjustment, summarize the skill of variance decomposition, and then gets the important factor of affecting the outside time lag in effect of monetary policy. According to the relevant principles, we choose one of those economic variables, which has the shorter time of time lag and the larger contribution of variable with final economic output and price's target as monetary policy intermediate target, it examines the rationality of taking M1 as the intermediate target. In the end, this paper takes dynamic comparison and analysis to research the appropriate answer of the controversial question in national academic circle, which is"Nowadays, is it essential to turn the active policy M1 into efficiency of monetary policy intermediate target.The empirical result shows that, during the real conduction of monetary policy in China, M1 displays the better effect in the field of both time lag in effect and variance contribution, so it is a rather suitable intermediate target in recent years. In contract, the credit channel has poor performance, because of the credit scale contribution to the final target is just a little, so it can be considered as the unsuitable intermediate target. It conforms to the reality of monetary policy intermediate target at the end of 20 century in China. The result of dynamic analysis indicates that, with deepening of the open policy continuously, the ability of M1 as the monetary policy intermediate target is lowering, and the efficiency of intermediate target's ability is increasing. Therefore, the conclusion is to do some preparation to turn the policy of M1 into the efficiency of monetary policy intermediate target in the future.