Research On Transmission Mechanism Of Monetary Policy In China

Monetary policy is an important instrument in macroeconomic adjustment and control in market economy. Effective monetary policy lies on smooth transmisson mechanism of monetary policy. The transmisson mechanism of monetary policy is to analyze how the monetary policy and its instruments affect the real economy through various financial variables. It 's one of most controvertible study in macroeconomic theory domain. It's also the focus and hotspot of the economic reform and study on economic theory in China at present. Therefore, the study of this problem is meaningful in both theory and realities.The process the monetary policy affect economy is complicate, which is accomplished by a series of transmissions including price channel, quantity channel and expectation channel. The price channel of monetary policy lead us adjust our assets makeup through its influence on the relative price of assets. The price of financial assets includes interest rate, price of securities and exchange rate etc. Thus there're three channels in the price channel. The quantity channel of monetary policy includes credit availability effect and wealth effect. The expectation channel of monetary policy includes inflation expectation effect, securities market expectation effect and risk expectation effect.After years of reforms of Chinese monetary policy , the transmission mechanism of monetary policy has been improved , however, the serious transmission barriers of monetary policy had been occurred because of multiple factors. The problems appear as the barriers in the interest rate transmisson mechanism, exchange rate transmisson mechanism and credit ration channel; invalidation of Tobin's q effect and wealth effect; influence on time lag of monetary policy transmisson by expectation of entities of economy. The reasons for the above problems are: imperfect operating mechanism of commercial banks and state-owned enterprises; immature financial market; weakening of the central bank's ability in adjustment; lack of credit system; aging of population and lag in social security system.In fact, the entities of monetary policy transmisson (central bank), the agency(financial institution and financial market)and the object (enterprises and individuals) are all needed to exert their strength to make monetary policy influence...