Research On The Two-way Impact Of Monetary Policy And Asset Price In China

In the past few years,as global economy and the promotion of financial deepening develops,the constant fluctuation of asset prices such as stocks and real estate has brought a strong impact to the macro economy.As the bursting of the asset price bubble directly led to the US sub-prime crisis in 2008,the fluctuation of asset prices represented by share prices and house prices has received more and more attention and attention.Monetary authorities in various countries have taken them as the focus of monetary policy regulation.In our country,with the macro-economy becoming more and more complicated and the financial market becoming more and more mature,the central bank often uses the monetary policy to adjust the economy and the operation is also getting stronger.Therefore,the relationship between the monetary policy and the asset price has become the present study focus.By studying the two-way influence relationship between the monetary policy and the asset price,the accuracy and forward-looking of the monetary policy can be improved,and the monetary authority can be helped to better cope with the fluctuation of the asset price and formulate the monetary policy.The theoretical and empirical analysis method are used to study.First,the paper combs the relevant research on the relationship between monetary policy and asset price by scholars both at home and abroad.The relationship between them is analyzed theoretically,which lays a theoretical foundation for the article.Secondly,using 156 groups of monthly data from January 2008 to December 2020,taking money supply and interest rate as the proxy variables of monetary policy and stock price and house price as the proxy variables of asset price.This paper establishes four VAR models to empirically study how monetary policy affects asset prices.It also makes an empirical study on the influence of asset price fluctuation on monetary policy.Finally,according to the impulse response function analysis and variance decomposition analysis,the empirical conclusions are drawn as follows: firstly,monetary policy can affect asset prices,and fluctuations in asset prices can also affect the intermediate objectives and ultimate objectives of monetary policy.However,compared with the two,the impact of monetary policy on asset prices is more significant.This confirms the theoretical part.Meanwhile,the conduction effect of monetary policy in China’s real estate market is better than that in the stock market.Secondly,as our country is in the stage of interest rate marketization reform,the impact of asset price fluctuation on monetary policy is not very significant and there are irregular fluctuations.Therefore,monetary policy ought to consider asset price factors to a certain extent,but should not use it as the only reference index.To this end,this paper makes appropriate policy suggestions.One is to pay attention to the fluctuation of asset prices and bring asset prices into the monetary policy reference system.The second is to enhance the diversity of monetary policy instruments,and reasonably mix traditional and innovative monetary instruments to make best of their respective advantages.Third,pay attention to asset prices,prevent inflation and improve information transparency.The fourth is to vigorously promote the reform of interest rate marketization,gradually release interest rate restrictions,and bring into play to the guiding role of interest rate in the market economy.Fifth,the regulatory authorities have taken relevant measures to improve market supervision and prevent financial risks.