The Research On The Asymmetric Regional Effect Of China’s Monetary Policy Under Financial Crisis

As a country with pockety resources endowment between different regions, Chinahas obvious regional effect of monetary policy. But the scholars mostly study theregional effect of China’s monetary policy based on the assumption of closed economy,ignoring the reality that the economic openness degree is increasing. So the paperanalyses the regional effect of monetary policy in China in the financial crisis based onthe assumption of open economy, trying to abundant the research about monetary policyregional effect based on open economy, provide the suggestion to improve China’smonetary policy effect and promote the harmonious development between regions.The paper consists of six chapters. Chapter1is the introduction to introduce thebackground and significance of this study, the researches about U.S. financial crisis andregional effect of monetary policy at home and abroad, the structure, the researchmethods and innovations.Chapter2is about the effectiveness of monetary policy and the theoretical basis ofhow the financial crisis affects the regional effect of monetary policy through the moneysupply structure and the monetary policy transmission mechanism.Chapter3first uses factor analysis to establish the financial crisis index to measurethe effects of monetary policy in eight integrated economic zones, and then explain thereasons of the differences through comparing data. At last, we get the conclusion that thearea with bigger open degree, higher proportion of processing trade export to total exportreacts and recovers more quickly and the area with more medium-sized and smallenterprises and private enterprises are more influenced by financial crisis.Chapter4measures the asymmetric regional effect of monetary policy in thefinancial crisis by panel model, getting the conclusion which is contrary to the researchconclusion based on the data by2005that the monetary policy effect of the MiddleYangtze River, the Proximity Southwest, the Middle Yellow River, the ProximitySouthwest, the North Coast, the Proximity Northwest, the Northeast and the South CoastIntegrated Economic Zones diminish in order. Chapter5based on the theories of Chapter2further analyses the reasons of the newfeatures of the monetary policy’s regional effect. First, the reduction of the fundsoutstanding for foreign exchanges results from the sharp drop of value of export in NorthCoast and South Coast Integrated Economic Zones leads to the enhancive money supplyless than other zones. Second, the asymmetric shocks from financial crisis to differentindustries lead to changes in the interest rate transmission of monetary policy. Third,financial crisis changes the influence of bank to enterprises and consumers in creditchannel.Chapter6provides suggestions from the macro and micro levels.