A Quantitative Analysis On Regional Effects Of Monetary Policy In China——based On The Credit Channels

To realize a specific economy target, monetary policy is the general term that Central Bank uses some guidelines and measures to control and regulate money supply or the size of credit.For a country, it also is the core means of macroeconomic regulation.Subject to slowdown of overseas economies, labefaction of external demand and appreciating significantly of RMB exchange rate in the previous year, our country’s external environment was so poor. These series of factors cased the economic growth declined more in the first half year. Faced with this situation, Central Bank started to increase the intensity of monetary policy. It lowered level and cut interest rates twice each in the first half of the year:the economy gradually stabilized in the second half of the year, the real estate market sales and price rose from July to August, American and European countries began a new round of monetary easing in September. The external risk gradually reduced, domestic economic data also improved.In the second half of the year, domestic monetary. policy easing accordingly weakened. The central bank was no longer through the lower level to maintain market liquidity, but frequently used the reverse repurchase tool of open market operations to inject liquidity to the market, monetary policy tend to steady.The monetary policy transmission mechanism is starting point of this paper. First, we sort out monetary policy transmission theory of foreign research, compare monetary channels and credit channels-the two conduction theory._Then, combining with the actual situation in China, we analyze the various transmission channels of monetary policy in China. We found the process of bank credit channel credit channel in the monetary policy transmission is the most obvious, determing the subsequent empirical analysis around the credit channels expand.Select provincial panel data of31provinces, municipalities, autonomous regions from2000to2008. According to the length of the term of the loan the financial of institutions total credit, we classify it and establish a dynamic panel data model. When doing empirical analysis on the relationship between China’s economic growth and the financial institutions credit structure, we respectively select panel instrumental variable method, difference GMM method and system GMM method to do regression estimation of dynamic panel data model, then compare and analyze the estimated results of the three methods, and do the final interpretation with the system GMM estimation results. Additionally, when analyzing on the regional effects of differences based on the credit channel, we continue to use the system GMM method to estimate respectively dynamic panel data model for eastern, central and western regions.Consequently, empirical analysis shows that industrial loans current GDP of the central region, followed by the western region, minimal impact on the eastern region. The affect of current commercial loans to GDP presents trend by decreasing in the eastern, central, and west. The affect of current agricultural loans to GDP is maximum, but impact on the western region is minimal. The affect of current basic construction loans is in turn increases the order of East, Central, West, and lag one pair of current basic construction loans also shows a significant impact. Additionally, lag one pair of current regional industrial loans does not show a significant impact. Only the impact of the eastern commercial loans to lag a value is more significant and the most. But the impact of agricultural loans lag of one pair of current GDP shows negative, and the eastern region is particularly significant.Finally, according to the conclusions of the empirical analysis, we propose number of policy recommendations to narrow the area of monetary policy effect.This paper is divided into five parts.The first part is the introduction, we firstly introduce the research background and research significance, then elaborate the main content of this paper and the research ideas, finally summarize the main characteristics and shortcomings.The second part is the document summary. This part expands from the theory and empirical research methods, summarizes some points of the existence and reasons of the regional effects of monetary policy at home and abroad, moreover do further classification and comment.The third part is the theoretical basis of the empirical research, starts from the theory of the monetary policy transmission channels expounded the theory of monetary policy transmission, and expands from the perspective of conduction channels, details of the monetary and credit theory of two transmission channels, at the same descript the basic situation monetary policy transmission channels. does good theoretical foreshadowing for later empirical analysis and inspection.The fourth part is the empirical analysis, proceeds from the more obvious credit channel of monetary policy transmission, does specific empirical analysis of the regional effects of monetary policy in China. This is also the main body portion of this article. According to the second part of the theoretical framework, we firstly do experience analysis, then do regional effects of differential analysis.The fifth part is the conclusions and recommendations, we do a complete summary and comb mainly from the research findings, policy recommendations, lack of research, and directions for further research.