| Monetary policy at the central bank can alter specific economic parameters and thus influence real economic activity in order to achieve regulatory objectives.The effectiveness of monetary policy regulation is dependent on the smoothness of the transmission channel,and in the past,China’s traditional credit regulation and other direct regulation means are mainly.As China’s economy shifts to a high-quality development model,the monetary policy regulatory framework gradually shifts from credit transmission to interest rate transmission,putting greater emphasis on regulatory accuracy.In 2019,the central bank reformed and improved the LPR formation mechanism,interest rate marketization as one of the most central reforms in the field of economy and finance.The interest rate transmission mechanism has been further opened up after more than three years of constant promotion.The impact of the epidemic hampered the development of the majority of central enterprises during the epidemic.As a result,the implementation of active and effective monetary control policies is critical to the real economy affected by the epidemic,particularly small and medium-sized businesses.Monetary policy tools,such as interest rates and credit,can have a large impact on the real economy and effectively transmit financial policies to it.Credit instruments,for example,can control financial liquidity in terms of the amount of money,whereas interest rate instruments can control financial liquidity in terms of the cost of acquiring money,both of which can act as monetary policy intermediaries.These intermediary instruments lay the groundwork for financial policy to benefit the real economy.In order to better conduct the study,this thesis,based on extensive reading of monetary policy,interest rate transmission mechanism,credit transmission mechanism and recent financial reform related studies at home and abroad,and combined with the author’s practical experience in banking,this thesis selects Keynes’interest rate transmission theory,credit transmission mechanism theory and monetary school transmission mechanism theory as the theoretical basis of the study.In the research process,the author chose the literature analysis method and the empirical research method as the main research methods,and put forward the relevant research hypotheses and tested them.The article selected 39 periods of data from the People’s Bank of China and the National Bureau of Statistics during the epidemic period,and carried out vector autoregressive models to verify the research hypotheses through the analysis of six variables:weighted average interest rate of loans from financial institutions,RMB loans of social financing scale,money supply,industrial value added,total retail sales of consumer goods and total investment in fixed assets.The findings show that:first,during the new crown pneumonia epidemic,the level of interest rates in China is more closely related to real economy variables than total credit;second,China’s social output responds significantly to both interest rate and credit shocks,and interest rate shocks are stronger,suggesting that central bank monetary policy exerts a more significant and longer-term positive effect through the interest rate channel;third,the weighted average interest rate on loans and the size of social financing RMB loans both contribute to the changes in real economy variables.This indicates that both the interest rate channel and the credit channel play a role in the transmission of monetary policy,but relatively speaking,the interest rate channel occupies a more important position in the transmission of monetary policy in China during the new crown epidemic.In this regard,this thesis puts forward relevant suggestions such as strengthening the role of interest rate transmission;taking equity into account in the process of monetary policy transmission;and making monetary policy more compatible with the real economy.It is hoped that the writing of this thesis can help the application and practice of financial transmission mechanism in China. |
