Research On The Effects Of U.S. Quantitative Easing Policy On The Stock Market

The United States took global financial crisis in 2007,the damage of large wide far as of the last century “great depression”. Stock market and the housing collapse, a large number of companies have failed, a large number of unemployed workers to apply for unemployment benefits, the economy into a recession. In order to save the collapse of the American economy, the fed opens the quantitative easing monetary polic y and other combination of continuous infusion into financial markets. The U.S. economy is stabilizing, the dow Jones industrial average began to rise, and set a record over the last two years. But the study found that, under the U.S. stock market boom are direct causes of America’s big stock repurchase behavior of listed companies, the transmission mechanism of monetary fund is very strange. Stock market’s prosperity depends on the company’s own stock repurchase, money of stock repurchase from the bond market, bond market’s prosperity was due to the low interest rates of bonds, bonds of low interest rates by market makers in the bond repo market and bond liquidity support, money of market makers from the federal reserve’s quantitative easing. In this paper, the key in this study is the fed’s quantitative easing policy on the impact of stock market.First of all, this article reviews domestic and foreign scholars from the conduction mechanism of quantitative easing, the effects of the implementation of quantitative easing, and the relationship between the quantitative easing and stock price; Second, describes the quantitative easing monetary policy for a detailed theoretical analysis, and compares the quantitative easing and the traditional monetary policy; Then analyzes monetary policy transmission mechanism and influence factors of the stock market; And then under the quantitative easing policy analyzes the reasons of the stock market booming specifically, this article in the bond market, stock repurchase and corporate debt financing three micro aspects to analyze the American market prosperity.More over,makes an analysis through the establishment of the VAR model, impulse response function and granger causality test.Empirical conclusions: First, the fed’s qua ntitative easing in the United States’ medium and long-term Treasury bond market has a positive impact in the short term, that QE releases the increment of money flowing into the U.S. debt market, caused a decline in bond yields. Second, the influence of the medium and long-term bond yields to the dow Jones index in the amount of stock repurchase is positive in general, and the prosperity of the U.S. debt market stimulates the stock repurchase behavior of listed companies. Third, in the short term, the United States share repurchase of listed companies on the dow Jones industrial average don’t have the influence of Volume and price rising, and impact on the dow Jones industrial average is more obvious than the effect of volume. Finally, this paper discusses the enlightenment to our country from five aspects.