The Choice Of Interest Rate Rule Under Monetary Transmission Mechanism

Monetary transmission mechanism is the important tool for monetary policy makers to stabilize the economy,the monetary policy transmission mechanism including money demand transmission channels and the credit transmission channels.Monetary policy changes aggregate demand through interest rate,at the same time,monetary policy adapts to the target of monetary policy by changing the loan availability and supply.At the same time,China’s monetary policy is still mainly rely on changing the money supply to adjust macro economy,and the endogenesis of money supply makes it lose effectiveness which rely on money supply.Our country gradually opens up the marketization of interest rate,interest rate rules is as another of the growing importance of monetary policy instruments,the interest rate policy effects on economic growth through transmission channels,and to analyze the interest rate rules of different forms,the choice of the future China’s monetary policy has a guiding significance.We take interest rates transmission ways and channels as the breakthrough point and the research object,analyze and discuss the microscopic mechanism of China’s monetary policy interest rate conduction process.Through the literature review,we think that interest rate policy conduction through three main parts: one is the interest rate that enhances the market demand for their currencies,improve its monetary value,have an impact on domestic consumption,the channels for "money demand";Second,high interest rates will compress social credit,indirectly effect economic output,the influence of the channel for "credit channels";The third,increasing in interest rates will raise government debt burden,improves the inflation expectations,will reduce domestic economic output,the channels for financial channels.On this basis,through the analysis of the development history of developed countries in the monetary policy rule,from the United States,Japan and Germany in the experience and lessons,this article use the intermediate target of monetary policy to stabilize prices and promote economic growth,put forward China should follow and respect in the process of interest rate liberalization in law.On this basis,using econometric method,from the Angle of macro monetary policy to investigate interest rate transmission process in empirical research,in order to investigate the quantity effect and regularity of the interest rate transmission of monetary policy,to provide empirical support in the theory of interest rate policy and its transmission by deep research.Then establish dynamic stochastic general equilibrium(DSGE)model to simulate the change of interest rate policy through "money demand" channels,"credit" and "financial" channels for economic growth,discusses the influence of countermeasures of promoting effect of China’s interest rate policy,provide decision-making reference for central Banks about effective monetary policy.This article fully absorb domestic and foreign research achievements about interest rate transmission mechanism,closely with China’s specific country’s situation,create econometric model and dynamic stochastic general equilibrium model,make innovative exploration in the following aspects:1.In view of deficiency of predecessors’ study on microscopic mechanism of interest rate transmission,this paper designed a model which from effect of the interest rate on loans,money demand and financial to explore the micro mechanism of the interest rate transmission mechanism,through the model we can get more in-depth analysis of how interest rates conduct the impact on market participants,has made the very good supplement to the existing interest rate transmission mechanism theory.2.Through the simulation analysis,explore the change of interest rate rules and lending,money demand and financial scale changes in interactive mode,analysis economic growth under the effect of three kinds of channel and with the interest rate rules change and change,more deeply reveals the law of the interest rate transmission,provide reference and basis for macroeconomic regulation and control of interest rates policy.3.Based on the exploration about China’s monetary policy interest rate in a specified period,this paper discusses the characteristics of transmission channels,using modern econometrics impulse response to provide an empirical basis,establish a dynamic stochastic general equilibrium model under the rules of different interest rate on economic growth,comprehensive,dynamic analysis the interest rate transmission channel of monetary policy.The article also make a positive exploration on how to apply modern econometric methods,numerical simulation method,and China’s monetary policy to search truth.In this paper,under the interest rate changes,the lending surge forward lead to a decline in lending rates that make a positive impact on the economy;the positive of finance lead to the rise in inflation,interest rates on deposits and bond yields,all these have inhibition effects on the economy;Money demand surge forward higher deposit rates to curb consumption led to a decline in economic output.In establishing SVAR model obtained empirical results and DSGE data simulation results are proved that the interest rate transmission "credit channel","financial channel" and "money demand" channel will have an impact on economic output.In the numerical simulation stage,this paper consider the different of interest rate rules in current period,the early and late information for the different effect of economic variables.In conclusion,our country is more suitable for use prospective Taylor rule,in full consideration the next output on the basis of information,the money supply and inflation,for our country’s economic output fluctuations caused by the smaller,more effective regulation.