Research on the Monetary Stabilization Policy
|Keywords||Monetary policy stabilization mechanism of action Inflation - output trade-offs System of monetary policy The impact of monetary policy|
According to traditional macroeconomic theory, a country's economy is usually due to aggregate demand shocks and aggregate supply shocks showing an unstable state, in order to avoid unnecessary output, unemployment and inflation and inefficient fluctuations lead to welfare losses The Theoretically usually think that the decision-makers of monetary policy and fiscal policy should be used to smooth fluctuations in the economy. From Hume's text that monetary changes are neutral units changes and that these changes lead to changes in employment and output in the same direction the tug of war between the two are not mutually incompatible views had already started, but in general words, in the currency short-term non-neutral, has basically reached a consensus, which provides an effective role in space to use monetary policy to stabilize the economic cycle. View from the macroeconomic development since the reform and opening up in China, since the decentralization reform from the formation to the two-track system, and the subsequent transition to a market economy system, the total economy, the structure and institutional issues continue to emerge, output Growth and inflation has emerged as a more substantial cyclical fluctuations, macroeconomic always in the process of a \Although, on the whole, the stability of the Chinese economy has more than the vast majority of countries, but macroeconomic volatility on China's macro-economic growth or causing a considerable negative impact. Correspondingly, the effect of the stabilization role of monetary policy in China does not seem to be satisfactory. Since 1977, China has appeared in a total of five economic cycles 1977-1981; 1982-1986; 1987-1990; 1991-2001; 2002 - present. The previous four times in the economic cycle, the three stabilizing effect of the so-called \And in 2002 began a new round of economic cycle, despite the 2003-2005 historic \gold, increased open market operations, the differentiated reserve system and financial institutions raised deposit and lending rates from the tight monetary policy instruments, in a bid to weaken the magnitude of economic overheating, to prevent inflation and financial risks, in order to ensure a relatively stable economic growth. But the macro-economic data in early 2008, China's overall economic overheating trend is not due to monetary policy control of a turnaround. Just as people are doubly challenged stabilizing role for monetary policy even when the accused, the subprime mortgage crisis sweeping the globe has triggered a global economic recession, which produced a great impact on China's macroeconomic notably shrinking external demand, overcapacity in some industries difficulties for businesses, an increase in unemployment in urban areas and significantly increased the downward pressure on economic growth. Down from \from \In fact, about the stabilizing role of monetary policy in China there are two important issues: first, led by growth in China has been using discretionary monetary policy is reasonable? Even after 30 years of high-speed growth has become the world's third-largest The economies of China, the monetary policy should be whether from growth-led steering stability-oriented problem still exists controversy, or in other words, whether many countries have adopted the so-called inflation targeting regime should adopt a more reasonable and effective. However, there are two reasons to prove that \the primary goal of monetary policy, the lower tool independence of the central bank and the inflation forecast accuracy is poor; Second, whether explicit or implicit inflation targeting regime, there are two problems, that may lead to higher output volatility and tend to ignore other policy objectives (for example, economic growth). Therefore, the problem is actually evolved into a problem: If it is not China's current monetary policy framework does not apply, or that at this stage we can not adopt a stability-oriented monetary policy, then solve the stabilizing effect of the monetary policy in China is being questioned is found theoretically activism monetary policy has some degree of rationality, and is in the process of stabilization there specific issues or constraints affect its validity play, which is what this article attempts to efforts to resolve the a major problem. Outside the text in addition to the Introduction, is divided into seven chapters, its main contents are as follows: Chapter 1 and Chapter 2 describes the theoretical basis and theoretical analysis of monetary policy in stabilizing role paradigm from a different perspective, so as to build monetary policy stabilization mechanism of action and lay a solid theoretical foundation. Chapter 1 \benefit costs may occur in the economic cycle, which put forward the need for stabilizing role of monetary policy. On this basis, further analysis of the currency's role in the economic cycle, \Chapter 2 is based on the aggregate demand - aggregate supply analysis based framework, along the order of the evolution of the IS-LM model, describe the different theoretical analysis and expansion of the School of IS-LM model as the basis for further analysis monetary policy in different theoretical paradigms stabilization mechanism, which not only outlines the stabilization policy from the mainstream to be abandoned, and then to the development process of reflection and rehabilitation, also proved the feasibility of the stabilizing role of monetary policy. From the beginning of Chapter 3, the use of three chapters devoted, respectively, three issues crucial role in the process of stabilization of monetary policy: goals, delivery mechanisms and effects of trying to sketch out a more complete framework for the role of monetary policy in stabilizing . Chapter 3 to the cost - benefit analysis of the main line on the welfare cost of inflation and the output of the anti-inflationary loss central bank facing the target in the process of implementation of the stabilizing role of monetary policy trade-offs, and on the basis of further analysis of the level of trade-off between inflation and output volatility tradeoff optimal stabilization target of monetary policy, which raised the output - to minimize the volatility of inflation. Assess accurately and precisely control speed is passed to the other parts of the economy in the process of stabilization role of monetary policy, the need to change the policy variables, the size and the effect size, clear friction of the monetary policy transmission mechanism and this effect is particularly important role in the course of the realization of the goal of stabilizing. Chapter 4 Based on this point of view, based on the description of the basic framework of the monetary policy transmission mechanism, two important monetary policy transmission channels - channels for interest rate and credit channels - pass effect analysis pointed out that the interest rate does not completely pass the effect of the presence of the financial accelerator effect and incomplete credit market conditions, the stabilizing role of monetary policy to a certain extent been weakened or enlarged, thereby increasing the central bank to use monetary policy to stabilize macroeconomic uncertainty. Chapter 5 looks at the effect of the level of analysis, the analysis of monetary policy stabilization effect method and the empirical evidence on the basis of the introduction of the expected factors expected the stabilizing effect of monetary policy is crucial, final The asymmetry of the stabilizing effect of monetary policy. With the international free flow of the economy, the deepening of the process of financial globalization, goods, capital, and labor increasingly stabilizing role in the mechanism of the monetary policy of a country is also becoming more and more complex. Based on this view, on the basis of the monetary policy stabilization mechanism built in Chapter 6 in the first three chapters, the introduction of the open economic factors, and tried to analytical paradigm of monetary policy in an open economy, the stabilization target weigh even exchange rate pass mechanism analysis, not only the more complex stabilization mechanism of monetary policy in an open economy, and so build a more complete stabilization mechanism closer to the objective reality, and thus provide a further evaluation of the stabilization mechanism of monetary policy in China the consensual analysis platform. Comprehensive previous chapter, you can clearly see the basic outline of the monetary policy stabilization mechanism built, Chapter 7, exactly as the basic framework for the analysis, the use of dynamic stochastic general equilibrium model of policy-based simulation and control and other quantitative analysis methods, quantitative evaluation of the stabilization mechanism of China's monetary policy at this stage, trying to make at this stage about the selection of the optimal monetary policy in China. The main contribution of this paper and innovation performance in the following three aspects: first, to break through the traditional mechanism of monetary policy framework, and highlights the stabilization of the reality of the problem, the establishment of an open, sustainable theoretical and empirical research analysis framework. In the study, in full possession of the Chinese and foreign literature, the monetary policy stabilizing inflation target - output dilemma, the monetary policy transmission process due to the presence of friction factors stabilizing role weakened or enlarged, expected the currency policy stabilizing effect impact of globalization on the introduction of the stabilization mechanism of monetary policy in mainstream textbooks, the basic framework constructed based on the stabilizing role of monetary policy analysis, not only of traditional monetary policy mechanism expansion, and to provide a solid theoretical foundation for objective, scientific evaluation of the stabilizing role of monetary policy in China. Second, deconstructs the stabilizing effect of the monetary policy process, goals - pass - effect analysis, important views affect the validity of the stabilization policies: (1) the optimal monetary policy stabilization goal is to make the output - inflation volatility is minimized; (2) the the viscous transfer and financial accelerator effects of interest rates in varying degrees, to weaken and enlarge the effects of policy shocks pass; (3) in reference to the stabilizing effect of monetary policy, we must first consider is which category the effect of monetary policy, and whether it is a system of monetary policy or monetary policy in a non-system, or the monetary policy is expected to monetary policy is still not expected to have an important impact on output. Third, quantitative evaluation is based on a simplified four-equation model of the New Keynesian stabilization mechanism effect on China's monetary policy at this stage, to make at this stage about the selection of the optimal monetary policy in China.