The Relationship Between Monetary Policy And Asset Price

Starting with the2008Financial Crisis, this article discusses briefly that asset prices inflation andcapital market expansion instead of inflation which obscure the adjustment signal of Americanimplicit inflation target monetary policy, and result in the hyper-loosed monetary policy of federalreserves which is one of the main reason of2008financial crisis.There is more and more people who relies the significant influence of assets prices to RealEconomy and more and more economists who agree with that monetary policy should payattention to assets prices. But opinions vary in this area yet. According to the research results theseyears, there are as like as chalk and cheese views in the problems that weather assets prices shouldbe paid enough attention, is monetary policy effective for adjusting assets prices, and if themonetary policy has took enough reaction to assets prices. So, it is necessary to take more researchin the issues that what is the relation in the hell between monetary and assets prices, and shouldthe assets prices be took into the adjusting system of monetary policy.Based the research of predecessors, this article moves forward in carding the final goals,intermediate goals and transmit approach of monetary policy, and pay much more attention inTobin q effect, credit view, household liquidity effect, household wealth effect and so on oftransmit approach of monetary policy by assets policy. Then, aim at the problems that if the assetsprices should be paid enough attention or not and is the monetary policy efficient to adjust assetsprices, I take demonstration analyses by dynamic trends, GRANGER test, VAR model solve, est..On the problem of weather the assets prices should be paid enough attention or not, I find indemonstration analyses that, in America, the invest effect and consumption invest of the changingof assets prices are obvious, and assets prices are responsible for the change of GDP and CPI; inJapan, the effect of assets prices change to the that of real economy is also obvious, maybe, whichis so regretful that I can’t checkout it very clearly by demonstration analyses because of the lack ofdata; in China, the invest effect and consumption effect of assets prices are inconspicuous, but thechange of assets prices are impact GDP and CPI in a certain extent, which illustrate that thefluctuate of assets prices are playing a more and more significant role in economy and should bepaid enough attention.On the problem of weather monetary policy is effective to pay close attention to assets prices, Ifind in my research that, it is not very obvious for stock price response to monetary policy exceptM1of Japan. Different to stock price, house price response to monetary policy is very obviously.I arguing that monetary policy should pay close attention to assets prices, mainly to house price.There are some scholars argue that monetary policy has already paid enough attention to assetsprices, although it has never kept a watchful eye on assets prices. I take a theory anddemonstration analyses mainly by dynamic trends, and which show that the attention monetarypolicy paid to assets prices are not timely, and produce harmful influence even.Based the argument the monetary policy should pay attention to assets prices, mainly to house price, directly, I summarize and analyze various academic views of how does monetary policy topay attention to assets prices. Then, according to theory analyses and the demonstration result ofthis article, I arguing that the most reasonable and effective approach for monetary policy to payattention to assets price is drawing up specific and detailed reply policy of monetary authorities, inlight of conditions of each country, to unusual fluctuate of assets prices which is definedreasonable and clearly, to smooth and steady economic grow.