Research On Financial Accelerator Of Monetary Policy Transmission Mechanism In China

An important content and challenge for researchers in macroeconomics are the reason of economic fluctuate, transmitting channel and persistence. Based on this problem, mainstream economist people provide us some mechanisms, in which the RBC model and IS-LM model are most popular. Though they have many differences, they depend on MM theory and so they have the same conclusion that there is no causality between financial structure and real economy. But that is not so ideal in reality. Many economics crisis have deal with financial credit. So the traditional RBC model can’t explain it completely. This paper makes an exploration on this problem and figure out a serial of problems like how financial factors effect economic fluctuations.Since Irving Fisher explains "The Great Depression" with debt-deflation theory, economists have begun researching the function of financial factors in economic fluctuations. It is thought that slight fluctuations can lead to great fluctuation through the transmission of financial credit market. Modern studies show that there exist information asymmetries in financial credit market, so MM theorem is not valid, which means financial factors must influence real economy. With the deeper study, this point gets much attention and affirmation. Bernanke provides "financial accelerator" as the summary of theory above. Our china is in the course of founding the socialist market economic system. Because of imperfectly efficient markets and information asymmetries in financial credit market, financial structure in China must have an impact on real economy, and monetary policy in China must have the financial acceleration mechanism for fluctuations of real economy.To resolve the problem of financial accelerator of monetary policy transmission mechanism in China, this thesis elaborates it in theory and practice.Firstly, this thesis introduces the background and development of financial accelerator. The financial accelerator considers financial credit market as an accelerator. Once there appears a small fluctuation in economy, its function can get great through financial credit market and even spread through the whole economy. Many scholars work on the relation between financial credit market and macroeconomic fluctuation in China, but most of them focus on analyzing financial accelerator macroscopically by macroeconomic data. Macroeconomic phenomenon is simple extension of microcosmic, so this thesis work for the microcosmic mechanism of financial accelerator through analyzing thirty sub-sectors of manufacturing with panel data.Theoretically, this thesis first analyzes and discusses the theoretical framework of financial accelerator, and then further analyzes the main factors and conditions which make monetary policy produce financial accelerator effect.Empirically, most domestic research analyze whether there exists financial accelerator or not from macroeconomic data, while macroeconomic phenomenon is simple extension of microcosmic. Some research does mean that there exists financial accelerator on macro-level in China. But different has different economic development and legal environment, so they have difference in the function mechanism of financial accelerator. This thesis first chooses investment quota and net value of thirty sub-sectors of manufacturing from January2003to December2006, and then uses panel data to analyze financial accelerator effect. Through SUR econometrics analysis, we find that seventeen of twenty-nine sub-sectors appears financial accelerator at sector level.Based on theoretic and empirical analysis, this thesis gives some suggestions about the choice of monetary policy. The government must consider optimizing the transmission channel of monetary policy the credit rationing behavior of commercial banks, thereby avoiding financial accelerator.In a short, I make good use of macroeconomic policies and monetary policy at graduate level to do the research about the relationship between monetary policy and financial accelerator. The purpose of this article is to find whether there exists financial accelerator of monetary policy or not in China.