The Impact Of The Fed’s Quantitative Easing On China’s Macroeconomic

Since the financial crisis, the Fed began to take unconventional monetary policy tools for promoting the recovery of the domestic economy by implementing large-scale asset purchase plan, and reducing the federal funds rate to 0 to 0.25%.Since November 25,2008, the Fed continue deepening the implementation of the three round of quantitative easing monetary policy. Affected by QE, the worldwide liquidity fulfill in the international economics, especially for emerging market countries. With the U.S. domestic economy gradually recovery, the Fed will implement the policy of exiting QE, and gradually tightening the money supply, raising the federal funds rate. Concerning this background, it is meaningful that analysis the QE’s impact on China’s macroeconomic, and how China should deal with QE exit policy. Most of the current research focuses on the theory of domestic research and implementation of QE, and analysis the inner relationship in this transmission mechanism.Firstly, we show the background of the implementation of QE, content, impact and the current status of research were studied and reviewed. Secondly, we applied a model of QE’s impact on a country’s financial market retrospectively. On the basis of combining the actual situation of China’s economy, we established an effective monetary policy information transfer model to study the QE policy implementation. Fed Chairman Ben Bernanke’s speech and FOMC meeting statement will be held after the declaration of China’s exchange rate for the Renminbi vs dollar exchange rate and the yield on the Shanghai index change impact.In this article, we not only put the fed’s communication into the model as dummy variables, and also studied the impact of the release of information on prices and volatility in financial markets. This article can deepen the research and we establish a GARCH model instead of a VAR model to promote the research in this field. It has an important reference value of studying the impact of QE monetary policy on the changes in the price and the volatility of financial markets.