China's Capital Market, Monetary Policy Transmission Mechanism

A great change has taken place in financial structure and economic environment since 1990s. Along with the deceasing function of traditional commercial bank, capital market has played more and more important role in financial activities. Under such backgrounds, this thesis focuses on the transmission mechanism of monetary policy through capital market in our country in order to solve the problem whether the transmission mechanism in our country is efficient. The thesis is aimed at analyzing how capital market acts on monetary policy, and then how it influences the entities through the price's fluctuation of assets.The thesis begins with the theoretical origin of capital market and monetary policy, expounding the transmission mechanism of monetary policy through capital market in monetary policy theory. It analyzes theoretically and empirically the effectiveness of monetary policy condition in capital market, and how capital market influences investment, consumption and entities. Furthermore it explores the underlying reason why the transmission mechanism of monetary policy through capital market is hindered and presents some feasible proposals on dredging such transmission mechanism as well as improving the effectiveness of monetary policyThen capital market influence money demand and money velocity. Through the analysis of direct and indirect influence, we can get the inclusion of the connection mechanism of monetary policy and capital market and of weighted influence on the establishment and implementation of monetary policy, and conclude and judge further if we should pay attention to the variety of capital market by changing monetary policy.Textual introduction part, is main to made a concise overview on the development of current capital market and the research on capital market influencing monetary policy by domestic, and abroad scholarChapter 1, firstly analyze the transmission mechanism of monetary policy by stock market in theory, then analyze it in demonstration way.Chapter2, firstly analyze the development of stock market affect the validity of monetary policy, then analyze how capital market influence indirectly the validity of monetary policy through money demand and money velocity, and demonstrate that capital market impact on money demand and money velocity.Chapter3, as final part, mainly research the transmission mechanism of monetary policy and how the establishment and implementation of monetary policy concern capital market, and put forward the related suggestion.