Research On The Effectiveness Of China's Monetary Policy Tool Innovation Under The New Normal

After experienced the extensive growth stage with the characteristics of "high input, high energy consumption,high pollution,high export,high growth",China's economic development has entered to a new normal with a significant feature of the slowdown in economic growth which reduced from the original years of double-digit high-speed growth to about 7% of the growth (GDP growth in the first half of 2016 was)since reform and opening up.We noticed that the strategic adjustment of economic structure and the strategic transformation of macroeconomic and financial control should also be following up in mechanism to suit the slowdown in economic growth.In order to effectively achieve monetary policy objectives and play the full function of monetary policy to macroeconomic,we should think deeply about how to select certain structural tools of monetary policy which is different from the old ones and take appropriate monetary policy combinations using both traditional monetary policy tools and innovative monetary policy according to local conditions.According to this, this article draws lessons from Bernanke and others, mixing Factor Analysis and VAR (Vector Auto Regression) into FAVAR (Factor Augment VAR), basing on the economic and financial data from the third quarter of 2005 to the second quarter of 2016, using empirical analysis and making a comparison, draw a conclusion that certain structural tools of monetary policy in the New Normal are more efficient, then move forward a single step to give suggestions about how to conduct the thorough research on the effects of tools of Chinese monetary policy.