The Optimal Choice Of China's Monetary Policy Under The Financial Stability Target

With the financial crisis sweeping the world in 2008 causing huge losses to the world economy,central banks and international economic organizations have opened up a major reflection on the current monetary policy and financial regulatory system.The goal of financial stability has aroused people's great concern.In the past,when the inflation target system achieved great success,the financial stability goal was often placed after the price stability goal.Financial imbalances will only be dealt with when the instability of the financial system has a major impact on the real economy.The view that monetary policy should clean up after the asset price bubble burst was strongly criticized.The laissez-faire of financial markets is the main cause of this crisis.Countries have set off a wave of financial system reform,highlighted financial stability goals,and strengthened financial supervision has become a consensus among academics and central banks.The prominent role of macro-prudential management in financial stability and prevention of systemic financial risks has also attracted the attention and in-depth study of a large number of scholars and policy makers.Under such a background,it is very important to study the adjustment of China's monetary policy framework under the goal of financial stability and analyze the optimal c hoice of China's monetary policy from a macro-prudential perspective.It is of great significance to improve China's macro-control framework and maintain stable economic operation.This paper first expounds the related concepts of systemic risk and inflation target system.On this basis,it sorts out the development of the theory related to monetary policy,and points out that in the past,the inflation target system achieved great success in the price stability target.The financial system has accumulated a large number of systemic risks.After the financial crisis,the international financial regulatory system was rethought and studied.Countries gradually established a macro-prudential management system with the core of preventing systemic financial risks.Secondly,combined with the development and current situation of China's monetary policy,it analyzes whether monetary policy should exceed the goal of price stability.Through the establishment of a four-sector DSGE model,using China's economic operational data for calibration and parameter estimation,compare the effects of different monetary policies,and compare and choose monetary policies suitable for China's national conditions.Our research results show that:(1)excessive leverage and risk-taking make the financial system more vulnerable;(2)price stability does not guarantee financial stability and even macroeconomic stability;(3)Taylor's ruled approach from a macro-prudential perspective Monetary policy helps to achieve the goal of China's price and financial stability.