| To achieve the set goals, monetary policy is all the policy and measures of the central bank to use various tools to regulate money supply and market interest rates in order to affect macroeconomic policy. As the main way of the central bank to regulate and control macroeconomic, rational use of monetary policy is important to maintain a stable and sound operation of China’s macroeconomic. In order to better explore the objective laws that monetary policy guides the economic development, we need to further study the monetary policy transmission mechanism and strengthen the knowledge and understanding, which is the main direction of monetary policy in theory and practice.Monetary policy affects macroeconomic through four channels, namely:the interest rate channel, the credit channel, asset price channel and exchange rate channel. Among them, the credit channel is the main transmission channels of monetary policy. Recalling the development course of China’s financial market, it can be seen, the central bank in 1998 abolished the state-owned commercial bank loans limit control, using various monetary policy tools to promote the interest rate market. But given the historical legacy and reality, China’s financial market system has not been perfect, the system is also not perfect, interest and exchange rates are not fully market-oriented, in an absolutely dominant position in the economy is still indirect financing system. The effects of the implementation of monetary policy in different economic status are ups and downs, so the scholars began to shift attention to the study of monetary policy asymmetry. Asymmetric monetary policy means that there is a significant difference between expansionary monetary policy in the period of economic overheating and tight monetary policy during the recession. The general objective of this paper is to illustrate the impact of asymmetric effect and the efficiency of channels of credit on monetary policy making by People’s Bank of China, which could be a significant reference towards promoting sustainable, healthy and harmonious development of national economy.Via using literature review, normative analysis as well as empirical analysis in this paper, monetary policy transmission channel would be resolved into two parts to be analyzed. At the first stage, People’s Bank of China uses direct or indirect monetary policy tools to take objectives in charge. This measure could make an influence of the capability and willing of loans to foreign countries by commercial banks and the companies to gain the loans from commercial banks. At the second stage, by using intermediate objective that is also named domestic credit, the monetary policy could be transmitted from commercials banks to companies. Theoretically intermediate objective could contribute to an increasing number of capital for companies in order to parturition and investment. All of these measures are aiming to adjust macro-economy via monetary policy. As to the aspect of empirical research, this paper will use time series analysis based on VAR model of the two different stages respectively. Three methodologies will be used in time series analysis: HP filter method in order to separate the positive and negative monetary shock, and both impulsive function and variance decomposition will be used to examine the empirical test.The main finding of the research is that monetary policy made by People’s Bank of China truly has an impact on the entity economy and finally it would be gain the original purpose through all kinds of lending practices of financial institutions. The most significant appearance of the credit channel mechanism is asymmetry. At the first stage, the variable factors of tight-money policy have a much more effective impact on the loan balance of financial institutions than that of expansionary monetary policy. At the second stage, loan balance of financial institutions, as an intermediate variable of monetary policy, has a more significant influence of GDP when it is under the circumstance of expanding rather than tightening. The expansionary impact of financial institutions’loan balance towards GDP tends to be a larger range and a shorter lag phase, which in accordance with the asymmetry of monetary policy. Moreover, the dynamic trajectory of the second stage is much more complex than that of the first stage. Considering the different appearance of conduction of credit channels under two stages, in order to promote the efficiency of monetary policy by credit channels, several constructive recommendations and conceptions are listed at the last part. |
