Research On The Monetary Policy Transparency And Expectations Management And Effectiveness Of Monetary Policy

Monetary policy is an important part of a country’s macroeconomic regulation and compared with fiscal policy, monetary policy is more commonly used and effective, therefore monetary policy plays a very important role in the economic operation also. The effectiveness of monetary policy is mainly reflected in the choice of the intermediate target of monetary policy and operational tools. Traditional monetary policy tools are often used when the market has adverse direction changes, nor was it the perfect tool without disadvantages. And traditional monetary theory think that the central bank’s monetary policy operations in secret in order to receive the best results. However, over time, to the21st century, the Governments’attitudes of the monetary policy transparency are changed. In practice, central banks have begun to slowly become more open and transparent. Whether in theoretical circles or practice, we all think monetary policy transparency has its special role and magical effectiveness, but the questions about "how it work" and "why" are have no depth study. This article wants to name the transparency of monetary policy and the expected management of macro-economic policies as the monetary policy tools, and actual link them to the effectiveness of monetary policy, hi the operation of monetary policy, if we want to ensure that monetary policy has no problem, taking measures to enhance the transparency of monetary policy and promoting market players to have effective and accurate market expectations are very important. Once the correct market expectations are formed, even without other effective monetary policy tools, the market will be developed in accordance with the direction set by the monetary authorities. Therefore, adopting the policy recommendations to enhance the transparency of monetary policy is very important to achieve effectiveness of monetary policy. The main content of the article focused on the following aspects: First, the transparency of monetary policy’s defined meaning and content; Second, the measure of monetary policy transparency index; Third, the relationship between monetary policy transparency and expectation management On this basis, we can view transparency of monetary policy as one of the monetary policy tools, with its soft, long-term effects of monetary policy objectives to guide the public toward the right action.The innovation of this paper can be conclude as three points below:First, systematic study of the Central Bank of the history of the development of monetary policy transparency, the actual meaning of monetary policy transparency and the measure of monetary policy transparency, then put forward the concept of transparency of monetary policy that is different from the traditional theory, and study the key elements of monetary policy, such as the source of information、the information content、communication channels、target groups and the feedback mechanism. On this basis, we can abstract transparent operation to improve the effects of monetary policy operational framework. Second,"localization" international research methods, then select the data of our country to test the transparency of monetary policy that formulated by the Central Bank of China and its relations with the public expected. In addition to considering the accuracy of public information factors and the market reaction factors, using the dynamic monetary policy transparency indicator approach to measure the effect of monetary policy; Third, learning the practice of in mature markets, combined with China’s national conditions, we want to put forward China’s new operating ideas and help the development of China’s market.