The Study On Monetary Policy Transmission Through The Channels Of Asset Price In China

In the background of economic globalization, China and foreign countries cooperateand communicate more frequently, also China’s economy develops rapidly, the scale ofdomestic stock market and real estate market unceasingly expands, asset prices have moreinfluence on economic activity. Recently some of the domestic and overseas scholars carryon empirical analysis, and verifies that the asset price is one of the effective channels totransmit monetary policy. But, as our country’s social system construction is relativelybackward, the concepts of consumption and asset structure different with each other, somekind of factors often restrict the effectiveness of asset price channel. Especially in the pasttwo years, domestic and international economic situation becomes complex. Therefore,Whether the monetary Policy can affect the economic entities through the asset Priceschannel and the effect of the channel is the key of our research.This dissertation uses the theoretical and empirical way to analyze the mechanism ofmonetary policy transmission through asset prices. Firstly, this dissertation expatiates thecontent of the mechanism of monetary policy transmission. Secondly state the criterion ofthe validity of the monetary policy’s transmission channel. Through this norm, analyze thepractical behavior of asset prices transmission based on monetary policy. Then, we adoptVEC model to study the affect of monetary policy transmission and draw in the conclusionthat the effect of China’s monetary policy on asset price is significant, the influence of assetprices on economic entity has limited impact. Finally, summarize the empirical analysisresults and propose related suggestion which is benefit for the monetary policy’stransmission mechanism.