Spillover Effects Of American Quantified Loose Monetary Policy On Sino - US Trade

In 2008, a debt crisis in America turned into an economic crisis and seriously break its economic, making the market suffer a big crush. For weaken the damage of the crisis, recover the domestic market, the Federal Reserve carry out several round of Quantitative Easing policy, and put down the interest rate to zero.Theory analysis of Quantitative Easing policy dates from Werner, Southampton University of England, it different from other traditional monetary policy of not only simply put down the interest rate and grow the monetary supply but also making policy target by quantitative. Then in 2001, Japan first use Quantitative Easing policy to stimulate its economic, and supply large amount of dates of Quantitative Easing, and enrich the theory of Quantitative Easing.We analysis the theory basic, target and policy result of America Quantitative Easing monetary policy in detail in this paper, Theory base of QE is Non-neutrality of money, Krugman’s “liquidity trap” theory and Financial Accelerator theory, FED also making specific target of QE, including stabilize the market, stabilize the price, stimulate the economic and stabilize the employment, base on the theory of QE in this crisis. The effect of QE is optimistic, and not only limit inland but do huge effect outland. As the major partner of America, China has been effect by QE from many ways. We analyze the overflow effect of QE to China by empirical analysis and theoretical analysis.We analysis international economic with MFD and NOEM, MFD is first created by Mundell and Fleming in 1960’s, based on Keynes analysis framework, and then joined with predictive assumptions by Dornbusch, in MFD model domestic demand, Foreign demand, exchange rate and interest rate are the factors that effect international macroeconomic transmission; NOEM is created by Obstfeld and Rogoff, its analysis framework is based on two-country dynamic general equilibrium model, and in this model CPI, price stickiness of exchange and monopolistic competition are the factors that effect international macroeconomic transmission.On the basis of the two model said above, we add Marshall-Lerner Condition to analysis how exchange rate influence developing countries and developed countries to analysis the outflow effect in China by America QE, Mostly performance in how China total volume of trade and America total volume of trade influenced by exchange rate.We also use monthly data of trade between China and America and data of America CPI, America PPI and exchange combined with theoretical analysis to do VAR empirical analysis of America QE’s outflow effect in China, We do individual analysis of America M2, America CPI, America PPI, America consumer confidence index and exchange rate to China total volume of trade, China total volume of import and China total volume of export, Analysis including Granger causality test and pulse effect,Result display that in short time America QE do positive effect to China trade but do negative effect in long time. According to the result we give five policy suggestions based on the recent China economic situation, including expand domestic demand, optimize the structure, accelerate CNY internationalization, complete credit system and diversification trade structure...