Research On The Regional Impact Of Monetary Policy On Employment

As the first of the "six stability" and "six guarantees",employment is the priority target of China’s macro policies.In the post-epidemic era,China’s unemployment rate has increased,economic growth has slowed down,and internal and external contradictions have become prominent.It is impossible to rely on traditional high economic growth to drive employment growth,and the adjustment effect of monetary policy on employment has come into the policy field of vision.However,China’s regional industrial structure and level of opening to the outside world are greatly different,resulting in monetary policy may produce regional effects in the transmission process,which may fail to meet the expected macro-policy objectives,and even have a negative impact on some regions.Therefore,this paper theoretically and empirically explores the regional effect of China’s monetary policy on employment,and the relevant research conclusions have important reference value for improving the accuracy of China’s monetary policy,promoting employment growth and realizing coordinated development of regional economy.Firstly,this paper arranges the relevant literatures on regional heterogeneity of monetary policy and the impact of monetary policy on employment.Secondly,the relevant classical theories are reviewed.Based on interest rate channel,credit channel and exchange rate channel,this paper expounds the transmission mechanism of regional effect of monetary policy on employment.Finally,by using 1978-2018 China’s 31provinces(municipalities and autonomous regions)annual datas,considering the global,spatial correlation and nonlinearity of the variables,building a semiparametric global vector regressive model(SGVAR),empirically test the regional effects of price monetary policy and quantitative monetary policy on employment,and the nonlinear influence of exchange rate changes to employment.The main conclusions are as follows :(1)The positive impact of money supply can promote the employment of different regions,and different regions have significant different influences.The eastern region has the biggest employment reponse,followed by the central region,and the western region has the smallest employment response.(2)The rise of the interest can inhibit the employment in different regions,with certain regional difference.In the long run,the impact on the employment in the eastern region is the largest,while the impacts on the employment in the central and western regions are small and the response results are relatively similar.Interest rate shocks have less impact on employment than money supply shocks.(3)Exchange rate fluctuations have nonlinear effect and regional effect on employment.When the actual effective exchange rate is less than the threshold value(120),the exchange rate elasticity of employment in the eastern and central regions is positive,and gradually decreases with the increase of the exchange rate.The exchange rate elasticity of employment in the western region is negative and close to 0.When the real effective exchange rate is higher than the threshold value,the employment elasticity of the exchange rate in the three regions is negative.The eastern region has greater exchange rate elasticity of employment due to their higher total import and export volume and external dependence.Therefore,this paper holds that the employment targeting monetary policy is beneficial to promote the coordinated development of regional employment and economic society,and regional differentiation is a necessary consideration in the formulation of monetary policy.