The Impact Analysis Of Monetary Policy On Stock Price Behavior

Quiet existing research literature results show that monetary policy and market micro structure has an impact on the stock prices,but there are not much more researches focusing on monetary policy’s impact on stock price were under the perspective of microstructure.As we know,in the procession of price formation,traders implement the trading strategies in accordance with the relevant information in a certain trading system,which acts on the share price.So it is necessary for this article proceed from the two microstructure variable i.e.traders and trading system to study the impact of monetary policy on stock prices.This article has developed the action mechanism from the traditional transmission mechanism,such as credit transmission mechanism,interest rate transmission mechanism,etc,to the information transmission mechanism,and proposed monetary policy transmission mechanism of stock market information on this basis above.From the information come from monetary policy,depicts the impact of information transmission mechanism of the theoretical framework of traders and trading system.We can see that the traders and trading system in the conduction process are playing important roles,in which the trader is the recipient of information,their learning and understanding of information act directly on the trading strategy formulation,and trading system function has an role not only in the efficiency and accuracy of information transmission,also affect traders trading way through trading rules,so we can conclude traders and the trading system will be affect the stock price through the monetary policy’information transmission mechanism.In this paper,empirical analysis was based on the theoretical analysis.Using the money supply,stock liquidity represent monetary policy and the stock behavior.Using the arrived strength of informed and uninformed represent for the traders,the price formation mechanism represent for trading system,then calculates the arrived strength of informed and uninformed by the EKOP model,similarly calculates the call auction and continuous bidding logarithm yield sequence represents the price formation mechanism.Then apply the above data to the three parts of empirical analysis,the first two parts respectively proved that traders and trading system have an impact on the information transmission mechanism,the last empirical part,in through of establishing three groups SVAR models which contains different variables proved that trading system and traders’ influence of monetary policy during the formation of the stock price,but also proved how a decrease in microscopic variables of SVAR impacts other microscopic variables’ difference performance when monetary policy affected stock prices.SVAR models,the relationship between the three groups SVAR is interaction and progressive,from part of the analysis to a comprehensive analysis.This kind of empirical structure can be applied to analyze the influence of traders and trading system on information transmission mechanism,also can be applied to analyze the different impact of the on the information transmission mechanism when combines the two microstructure.Empirical studies found that,firstly,different trading system design can influence not only the transmission efficiency of monetary policy information,but also the arriving strength of different traders;secondly,traders’different response to monetary policy information would play a role on stock prices;finally,trading system and traders play a role like "processing" in the transmission of monetary policy to the stock price,this process can enhance this transmission,or weaken the direct effect.