Research On Transmission Effect Of Monetary Policy In Underdeveloped Regions Of China

Regional monetary policy (RMP)is an important dimension in view of the scope of its Meso-level monetary theory.How to make RMP transmits effect become an more and more important subject which plagued the monetary authorities and the theoretical circles. To define underdeveloped functional regions(UFR) from the financial and economic characteristics of our country and to analyze its transmission effect of monetary police can be served as a classic case for viewing unified national monetary policy conduction at the regional level. To analyze UFR within system paradigm is useful to open the black box (that is RMP transmission mechanism during performing regional effect) and to streamline the complex conductivity relations between the intra-regional, the regional and another regional, the regional and the national.In this paper, the regional monetary policy transmission mechanism was as the core, UFR of our country was selected for analysis of targets. It was trying to give a comprehensive exposition of regional monetary policy transmission channels and processes. Firstly, it analyzed the monetary policy assumptions belong to UFR of our country; secondly, it determined which conduction channels is the most likely exist according to the financial and economic property of UFR by logic; thirdly, it built regional monetary policy analyses system paradigm and the test models between the three type relationships according to relative monetary theories; lastly, it conducted an empirical analysis to view the effects of RMP in UFR of our country basing on depth analysis of samples, which was resort to vector auto-regression (VAR)model.Study shows that: The monetary policy transmits in UFR of our country exist an asymmetric "double channel", that is, credit channel belong to the main one, the interest rate channel as another one; short-term effectiveness of monetary policy in UFR of our country is significant, but the long-term effectiveness there be not able to determine, anyway, long-term effects will be weakened considering the cash leakage effect in UFR of our country.Based on the further analysis of the empirical results, this paper has put on some policy recommendations, that is, to set up a practical system of regional monetary policy , to coordinate and integrate the policy mechanisms for regulation and control of regional monetary policy, which is in order to improving regional monetary policy transmission mechanism of our country.