The Differential Regional Effects Of Monetary Policy In View Of Differences In Regional Financial

In our country’s decades of historical change, monetary policy is an importantmacroeconomic regulation and control tools, it played a very important role in maintainingprice stability and promoting economic growth. Our country executes unified monetarypolicy, but after decades of development, the level of economic development, industrystructure, market-oriented financial aggregates, and financial structure are differences invarious regions in China, due to these differences, the implementation of monetary policyin the country will be different, and it will lead to the effect of the weakening of theimplementation of monetary policy, while increasing individual imbalance between theregions, this process, which we call the regional effects of monetary policy. We study onthe reason of the regional effects, then we can fully consider the development of a regionalfinancial differences when we formulate and implement monetary policies, thereby reducethe presence of the regional effects, this is the meaning and focus of this paper.We begin with the monetary policy transmission mechanism theory, then put forwardthe existence of monetary policy area effect on the analysis of the monetary policytransmission environment difference, based on this, we select four cities instead of fourtraditional economic zones, east, middle, west and northeast. then analyze the differencesin their level of financial development. We have a brief review of the various stages ofChina’s monetary policy, then select a large number of economic data of theserepresentative cities and provinces, using VAR model and impulse response function, toempirical monetary policy area effect existence from the monetary transmissionmechanism of the internal and external two process. Finally, we find out the reasons inorder to narrow monetary policy area effect better from now on and promote thecoordinated development of the regional economy.