The Impact Of Shadow Banking On The Economic Cyclical Asymmetric Effects Of Monetary Policy In China

The asymmetric effect of monetary policy has always been a hot issue in domestic and foreign studies.There are great differences in the effect of monetary policy in different phases of the economic cycle.In recent years,China's economic growth rate has been in a period of decline and low in the economic cycle,entering the “new normal” period,and the economic situation has become more complicated.Studying the differences in the effects of China's monetary policy at different stages of the economic cycle is of great significance for adjusting China's monetary policy to adapt to the current economic situation.At the same time,with the continuous expansion of the size of China's shadow banking,it has increased the difficulty of macro-control of China's monetary policy.And many studies have shown that the development of shadow banking has a "procyclicality",which develops more rapidly during economic prosperity than during economic recession.Therefore,from the perspective of shadow banking,this paper explores how the development of shadow banking will affect the asymmetric effects of cyclical monetary policy at different stages of the economic cycle.This dissertation uses a combination of qualitative analysis and quantitative analysis of research methods.Firstly,the definition and classification of the shadow banking system in China and the introduction of the "procyclicality" of shadow banking are used.The Pearson correlation analysis is used to prove the procyclicality of China's shadow banking and analyzes the "procyclicality" causes of shadow banking;The in-depth analysis of the causes of the cyclical asymmetric effects of monetary policy has revealed that the important reason for the asymmetric effect of monetary policy in China is due to the asymmetry of credit transmission channels.Then,on the basis of the foregoing,the shadow banking was included in the process of credit transmission channels for monetary policy,specifically analyzing the effect of shadow banking on monetary policy in the first and second phases of credit transmission channels for monetary policy under different stages of economic development.The impacts are analyzed from the perspective of shadow banking to analyze the effect of its asymmetric effects on cyclical monetary policies.The following conclusion was drawn: In the first phase(central bank-commercial bank),if the economy is in a period of expansion,shadow banking will affect the effectiveness of monetary policy by providing tools for commercial banks to evade supervision,weakening the effectiveness of monetary policy during the period of economic expansion;If the economy is in recession,shadow banking will enhance the effect of monetary policy transmission;In the second phase(commercial bank-enterprise),if the economy is in an expansionary period,shadow banking will enhance the alternative functions of commercial banks,provide new financing channels for companies that cannot get bank loans,and inject a lot of liquidity into the market,reducing the effectiveness of monetary policy;In the period of economic recession,the existence of shadow banking can provide funds for companies that are unable to obtain loans because of banks' "reluctant loan" behavior,but due to the existence of "procyclicality" of shadow banking,this effect is usually very small.In general,the existence of shadow banking weakened the monetary policy during the economic boom,enhanced the monetary policy during the recession,and weakened the asymmetric effects of cyclical monetary policy.Finally,this paper uses MS-VAR model to verify that the development of China's shadow banking does weaken the economic cyclical asymmetric effect of monetary policy.