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The Dynamic Equilibrium Relationship Research Between Asset Price Volatility And Monetary Policy

Posted on:2017-07-12Degree:MasterType:Thesis
Country:ChinaCandidate:Y L WangFull Text:PDF
GTID:2349330485476516Subject:Industrial Economics
Abstract/Summary:PDF Full Text Request
In the new century, with the degree of economic globalization and financial liberalization gradually deepened, sustained and healthy development of a country’s economy requires central bank policy control level higher, and monetary policy as an important tool to promote macroeconomic Sustainable Development of the central bank, carrying out reasonable and effective monetary policy is very important. But the asset price volatility in recent years, leading to strong capital market volatility,especially for the emerging market countries, asset price volatility will lead to negative outcomes, how to rationalize and deal with the relationship between monetary policy and asset prices become an important subject.With China’s capital market structure optimization and the larger scale,the effects of capital markets on the macroeconomic is growing, stock prices and real estate prices as an important indicator of asset prices, the price volatility will affect the validity of monetary policy inevitably. Firstly, the thesis has a Comprehensive Review on the relationship between monetary policy and asset price volatility,considering that with stock prices and real estate prices, represented by the manipulation target asset prices, having an increasing effect on the ultimate goal of monetary policy and the transmission mechanism of monetary policy instruments;Simultaneously monetary policy will be through the money supply and interest rates and other monetary policy tools have an impact on asset prices. In this theory, based on the data,by using the IS-Philips model and the least squares method,comparing and analyzing whether asset prices as one of the variables of the model,found that the addition of IS-Philips asset price inflation and the output gap model enhanced predictive capability. While building China’s monetary policy reaction function, test results confirmed that added asset price variable monetary policy reaction function is more consistent with the actual situation in China.Finally, according to the empirical results, this paper argues that monetary policy should response to abnormal fluctuations in asset prices react and improve the ability to interpret information asset price volatility, only do it central banks can make forward-looking and predictive considerations,and strengthen the central bank macro-prudential supervision in order to maintain financial stability.
Keywords/Search Tags:monetary policy, asset prices, IS—Philips model
PDF Full Text Request
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