The Research About The Effect Of China’s Social Financing Structure On Effectiveness Of Monetary Policy

With the establishment and improvement of China’s socialist market economicsystem, level of economic monetization has significantly improved; its effect on theeconomic operation has also highly strengthened. Thus monetary policy becomes thecore of macroeconomic policy. In this change process, the traditional means offinancing is gradually transformed into an innovative ways, which adapted to marketeconomy. The space and environment monetary policy always live in has undergoneprofound changes, and whether the effectiveness of monetary policy has effected bythe change of object financing environment becomes a issue, which involves the fieldof macro-financial theory and affects the macro-regulation goals in practice.This article started from the analysis of changes in the social financing structure.it specifically defined the content and distribution of social financing structure andfully descript outstanding feature of financing structure changes in the past8-9years.Finally the article summarized that changes are referred to direct financing andindirect financing. Changes in the financial structure means that micro-environmentand space which influenced the monetary policy has improved, then the effectivenessof monetary will be influenced at a certain degree. This text takes this issue intotheoretical analysis, can reached a conclusion through M.Friedman-A.J.Schwartztheory concerning to determinants of money supply. The reduction of credit marketswill fundamentally weakened the effectiveness of monetary policy, and the account ofdirect financing expansion will increase the instability of the monetary policy effect.The developments of direct financing will gradually weak the effect of traditionalmonetary policy. At the same time, the explanation of this problem has also gottenempirical test of VECM model, which provided specific direction on how to improveand strengthen the effectiveness of monetary. The changes in the social financingstructure have its own historic features, and its influence on monetary policy isaccumulated in the process of historical changes. How to combine the both betterremains further exploration.