Study On China’s Monetary Policy And Effect After U.S. Subprime Mortgage Crisis:2007-2011

Triggered by U.S. subprime mortgage crisis, China’s domestic economy has experienced a crunch crisis, and then it rebounded rapidly when touched the bottoming of economy within a short-term. After that it turned into high inflation pressrue.and all this during2007～2011.Economic fluctuations exacerbated by this short period of time has brought unprecedented challenges to the selection and mplementation of domestic monetary. Due to unfinished interest rate marketization,the adjustment of the money supply will naurally become China’s main policy control means.The effectiveness of monetary policy is the precondition and foundation of its controls.Only in the monetary policy is effective, the use of monetary policy nstrument can impact the implementation of its objectives. And it ultimately take effect on real output and other macroeconomic variables, and thus achieve the macroeconomic regulation and control purpose.The problem of the effectiveness of monetary policy involves two main theories: the viem of endogenous and exogenous monetary, then the view of neutality and non-neutral monetary.Onlu in the situation that monetary is non-neutral characteristics, monetary policy have an impact on the real economic variables, thereby affecting the changes of real output.,and this further relates to the effects of police. Otherwise, it is ineffective and not affecting actual output. If money is endogenous or exogenous, it directly impact monetary policy’s implementationand mode of action. When it is endogenous,there will be a certain degreee of difficuty for police formulation and implementation.In order to make a study on China’s monetary polic and effect in this period, the paper selected for main macroeconomic data like the money supply, output and price lecel,.It use of variable-auto-regression (VAR) model and related measurement model to setup the empirical analysis. On this beside, this paper make a research and judgmentthe of actual effectiveness of the current monetary policy, and draw the relevant conclusion of this period that China’s domestic currency is non-neutral and endogenous.The certain characteristics is effctvie in general. But there are some obstruction and time lag during the transfer process. This conclusion from this paper has a certain significance for the reseatch background of further tightening crisis.