The Research Of Monetary Policy's Effect In Credit Channel

The purpose of establishment and implement the monetary policy is to realize policy targets,which not only depends on choosing of intermediate targets of monetary policy,but also depends on monetary policy transmission mechanism.The reform of the financial system and the development of financial market make transmission mechanism increasingly diversified.However,bank credit channel is the major monetary policy channel in china for long.So,researching effect of monetary policy in credit channel has a great of academic and realistic meaning.This paper researches the effect of monetary policy in credit channel from theory and practice.The paper consists of six chapters.Chapter one is introduction,which involves background of selected title,research approach and structure of the paper. Chapter two summarizes the theory of credit channel and introduces recent studies in the fields.Connecting with the current financial situation in our country,Chapter three proves existence of credit channel by CC-LM model.Chapter four introduces MS-VAR model and methods of variable selection.Chapter five reveals the relationship of two variables in business cycle and analysis the results.Based on the analysis and conclusions,Chapter six raises some proposals including increasing effective credit supply and establishing the stable mechanism of economy and financial market.This paper has some conclusion:1.Development of capital market and supervision of bank have impact on existence of credit channel.And credit channel exists in china for a long time.2.There is a positive correlativity and a steady equilibrium relationship in the long run between credit supply and production.At the economic turning point,making companies have an optimistic attitude toward the future and strengthening banks' ability to withstand risks can keep credit channel clear and make countercyclical monetary policy effective.3.Credit supply increases at a quick pace when output increases rapidly.And during different phase of business cycle,the response of output to credit shock has asymmetry.The conclusion proves there is difference in the effect of monetary policy when business cycle is brought into the frame of analysis.