Research On Spillover Effect Of The Deviation Between Unconventional Monetary Policy And The Real Economy Of China

Since the outbreak of the financial crisis, unconventional monetary policy has become the best choice for central banks to stimulate the real economy. A series of unconventional monetary policies with quantitative easing as the representative have brought excessive money supply, but haven’t really driven the rapid growth of the real economy. There is an exactly abnormal phenomenon existing that the Marshall K value which is the ratio of China’s money supply and GDP is obviously rising. Namely, the money supply and real economic growth have appeared the significance of deviation. Mackinnon(1997) called this disjoint phenomenon between the changes of money supply and real economic variables like the output as "Monetary Puzzle in China". Based on this background, according to the deviation of money supply and the real economy in China, we theoretically analyze the transmission mechanism of unconventional monetary policy to the real economy and present the spillover approach and deviation performance through the statistical description. Then, we investigate the response of different industries to money supply shock by the Autoregressive Distributed Lag Model. At last, we explore the spillover effect of the deviation between unconventional monetary policy and real economy through the mathematical model and Vector Auto Regression Model.The results show that the coordination degree of virtual economy and real economy of China is not high during the 2002-2013 years. And there is money leakage from the real economic development to virtual economy in certain level. Deducted its own contribution rate, the contribution rate of real output growth, real estate sales growth, stock market turnover growth and financial institutions deposits growth to the Marshall K value were respectively5.6%, 3.6%, 18.8% and 2%.The large difference between the real economy and virtual economy makes that the money supply doesn’t really go into the real economy at the first time. However, it is spilling over into the virtual economy taking the stock market as representative.Therefore, we can not rely solely on increasing money supply to stimulate economic growth. The most important is to meet the normal fund demand in the development of China’s enterprises and to promote the consumption and investment. We can reduce the preventive motivation of the public to the money by improving and perfecting our country’s social security system. And we can narrow the gap of the return rate between entity investment and financial investment through consolidating the market economic system and improving the mechanism of tax. What’s more, we should speed up to solve the problem of non-performing assets of commercial banks. We should make full preparation to support the real economy developing well.