Research On The Applicability Of The CC-LM In The Less-Developed Regions In China

In the environment with governments in the current economic management adopting a neutral policy, whether the effectiveness of the implementation of monetary policy becomes a theoretical focus of the study circles. From the recent implementation of monetary policy, the central bank uses reserve ratio, deposit and lending rates, window guidance, and open market operations as a tool to adjust the credit amount and stable economic conditions. But It often has a gap between the effect of monetary policy and expectations, and the result is not satisfactory.Positive analysis versus normative analysis, quantitative and qualitative analysis, comparative analysis and other methods of study are used by this paper to make study applicability of Bernanke's 1988 CC-LM model in less developed areas, and from the perspective of monetary policy transmission mechanism to improve the effectiveness of monetary policy in less developed areas. The paper analysizes finance, industry, enterprise structure and population preference structure in China's underdeveloped areas and sums up the status of economic development in underdeveloped areas. By analysis the economy condition in less developed areas when the central bank adopts tighter monetary policy and monetary policies, we can have the effect of implementation of the monetary policy in less developed areas. By the analysis of the economic environment, monetary policy transmission channels and CC-LM model fit nature, the applicability of CC-LM model is summarized in the less developed regions, and by analysis of the factors derived the applicability of CC-LM model. At last,we study the practice of monetary policy transmission channels, based on rational thinking of less developed areas.In order to play the role of monetary policy transmission in China's less developed regions and improve the effectiveness, we must improve monetary policy transmission channels. Considering different economic status in the developed regions and less developed regions, so that we can make differentiated policy measures.