The Deposit Reserve Policy Transmission Channels And The Effects Of Policies

In recent years, as an important tool of monetary policy in China, deposit reserve system has played a role in regulating macroeconomic and controlling the amount of money supply. Deposit reserve policy can act on the money multiplier and thus change the base money and the money supply. Compared with other monetary policy tools, its effect and action intensity is relatively strong. Although in many developed countries its policy role has been gradually weakened, in our current national conditions, the existence of the deposit reserve policy is still important. In view of the high savings rate in China, bank lending channel is still China’s crucial financing channel. Limited by our financial markets, open market operations are difficult to play its due role. Under such circumstances, the deposit reserve policy is still a powerful policy tool. Deposit reserve policy in recent years has drawn the academic community wide attention from many scholars. In attention, many scholars have conducted extensive research on it. However, with the changing of the economic situation in China, the deposit reserve policy also need to be constantly improved, so the research of the deposit reserve policy-relevant theory and how to improve its effect can contribute to the better conduction of the monetary policy and further the better regulation of macroeconomic.The second chapter is the study of the theory of the deposit reserve policy. It introduces the deposit reserve policy transmission mechanism and pathway. It analyzes the similarities and characteristics of the deposit reserve policy and it also introduces the usefulness of our deposit reserve policy and the reason why other countries has weakened the deposit reserve policy. The part of empirical analysis uses the error correction model to make an empirical analysis of the effect of the implementation of the deposit reserve policy of China from2008to2012. Analysis indicates that effect of the deposit reserve policy on the money supply is poor in the short-term and the effect of deposit reserve policy on price stability is not evident in the long-term. Then the paper analyzes our existing deposit reserve system deficiencies and the suggestions. The paper give some specific suggestions including strengthen the regulation and reduce the interest rate of the reserve.