Research on the effectiveness of China's monetary policy

Author: Wang Hongju
Publisher:
Publish Date: 2003-05-01
Features: In the past decade, the Nobel Prize in Economics has been increasingly awarded to experts who have made outstanding contributions in the fields of finance and economics. At the macro level, the policies of fiscal and monetary management departments increasingly reflect the essence of economic thinkers. At the micro level, financial and tax theory has become an important tool for guiding the decision-making of economic entities. "Financial and Economic Science Library" aims to apply the frontier theories of Western finance and economics to China's economic practice, hoping to provide some inspiration for the advancement of China's financial system reform. The effectiveness of monetary policy is a complex and widely discussed issue, with a large number of domestic and international literature providing theoretical and empirical analysis. Based on the existing literature and considering the institutional constraints during China's economic transition, the author of this book analyzes the changes in the effectiveness of China's monetary policy after the reform and opening-up. Through extensive empirical analysis, the book explores the impact of many factors on the effectiveness of China's monetary policy, including the uncertainty of the aggregate supply curve, the low interest rate elasticity of aggregate demand, the instability of money demand, the endogeneity of money supply, the ineffective transmission mechanism of monetary policy, the weak independence of the central bank, the multi-objective constraints of monetary policy, the failure of intermediate targets and policy instruments, and the uncertainty of monetary policy rules. The book conducts exploratory research on the guiding significance of the aggregate supply curve for monetary policy operations, the reference significance and practical difficulties of inflation targeting for China, the measurement of the independence of the People's Bank of China, the basic money rule and the refinance rate rule of China, and advocates for the implementation of a cautious monetary policy with both preventive and forward-looking features.