The Mechanism Of Stock Market Transmitting Monetary Policy Of Our Country

Since the 1990s,the development of the capital market has an important effect on the monetary policy.The development of the capital market makes the monetary policy transmission mechanism which distorted and complicated.Thus,the Studying on the relationship between capital market and monetary policy becomes. an important subject.The monetary policy mechanism transmitted by the stock market is such a process:the operation of monetary policy tool impacts the variables in the financial field which impact the variables in the real economy further.Therefore,the mechanism of stock market transmitting monetary policy can be divided into two close steps:from monetary policy to the stock market;from the stock market to the real economy.In the first step,the effection on the stock market by the monetary police can be divided into two steps.we may select interest rate and currency supply as the variables transmitting monetary policy,and analyze the relation between the changes of interest rate and stock price,the relation between money supply and the money demands in stock market.In theory,the change of interest rate may causes an negative impacts on the change of stock price.In order to stimulate the economic growth,Central Bank reduces the deposit and loan interest rate eight times from May 1 in1996 to February 21th in 2002 continuously.The stock market response sensitively.Next exchanging day,the stock price goes up quickly.In the second link,we may select stock prices as the variables in the stock market and investment and consumption as the variables in the real economy field.In theory,stock prices influence investment and consumption through wealth effect,Tobin's"Q"effect and balance sheet effect.The empirical model proves that the changes of stock prices have not been one of the greatest factors which influence investment and consumption. Therefore, there is a conclusion that the first link which the mechanism of stock market transmitting monetary policy is expedite and the second link is blocked. The question accords to the actual conditions in China. The scale of stock market in China is small, and the development is not mature. The stock price is distorted in a extent which can't be as the signal of disposing resources effectively; The financial market is in the state of cutting apart, and the money market, bond market develop and lag behind relatively; The economy in China is in specific transition period, the economic system of the market is still imperfect, the investment and consumer behavior of the micro subject are influenced by a great deal of factors in social environment. These measures such as developing and maturing the stock market, improving the quality of the listed companies and setting up perfect social security system can reduce the uncertainty in the future and improve the expectancy of the micro subject. Meanwhile, the development and maturity of the stock market can improve its efficiency in transmitting the monetary policy.According to the theory, this article can be devided into five charpters. the first one is the introduction and The first chapter is introductory remarks which introduce this topic research goal and significance, the literature summarize, the research technique. In the second chapter, analys the transmission mechanism of monetary policy. The third chapter mainly the mechanism of stock market transmitting monetary policy. The fourth chapter analys the mechanism of stock market transmitting monetary policy in an statistic way. The fifth chapter on the basis of the fourth chapter raises some suggestions to strengthen the validity of the transmission mechanism of our monetary policy.