The Correlation Analysis Of Asset Price Volatility And Monetary Policy

With the development of asset markets and the proportion in the national economy growing, the authorities take good serious to the property price. However, on whether interference in the capital price for monetary policy, there are two diametrically opposed views, one of which is that maintain the monetary target complex unchanged; another advocates the intervention in property market, the reason is that capital price can be a good regulation for market, playing a role of steady economy. By the analysis of the mutual influence between property price and monetary policy, this article tries to make the role of the property price in conduction mechanism of monetary policy clear. The purpose is that solving whether asset prices should be incorporated into the monetary policy objective system or not, and how monetary policy should react according to property price fluctuations.First, this paper makes a summary about definition of asset bubble to make it clear that what makes asset bubble. Then pull the principle of asset pricing in, make reasonable price range. Subsequently, from the operating objectives and the ultimate goal, we analyze the current monetary system, pointing out that at present monetary policy is more concerned about price stability and policy objectives are in conflict with each other. The fourth chapter is the centerpiece of this paper, in this section, we analyze the role of asset price in transmission mechanism of monetary policy, and the result is that the transmission in asset price is not significant. In the end, give the conclusion how monetary policy should reflect in condition of asset price volatility. And then point out that monetary policy should take care asset price, rather than focus on.