An Analysis on the Economic Effect and the Spillover Effect of Unconventional Monetary Policy
|School||Shandong University of Finance and Economics|
|Keywords||Unconventional Monetary Policy Economic Effects SpilloverEffects|
Since the United States financial crisis hits the global economy in2007, to getrid of the recession as soon as possible, all countries in the world are looking for theeffective regulation of monetary policy. Because the traditional monetary policyeffect is not very significant, each country innovates the monetary policy tools oneafter another and proposes various forms of unconventional monetary policy, whichhas attracted extensive attention of scholars. However, as a new kind of monetarycontrol, unconventional monetary policy raises all kinds of disputes since the use ofit，and different opinions exist in the aspects of control measure，transmissionmechanism and its effects. After the crisis, this kind of unconventional policydifferent from the traditional monetary policy is frequently used in the majordeveloped economies, which is first large-scale use in the world’s economy history,and that would have such strong impacts for the world economy, including China andother emerging market countries. Therefore, exploring the economic effects andspillover effects of unconventional monetary policy become one of the current hotissues, which have outstanding research significance.In recent years, main countries have carried out the unconventional monetarypolicy, starting from this backgrounds, this paper systematically combs academiccontroversy about the unconventional monetary policy theory, analyzes its economicand spillover effects, and proposes suggestions of China’s response to spillover effectson the unconventional monetary policy. The full text is divided into five parts: Thefirst part is the introduction. In the second part, the different views proposed byscholars about the theory of unconventional monetary policy is defined, in order toclearly define the basic content of unconventional monetary policy in theory and therelationship between the traditional and unconventional monetary policy. In the thirdpart, firstly, from the perspective of theory, the paper explores the economic effects ofunconventional monetary policy transmission mechanism and influence factors, andon this basis, by using the impulse response and variance decomposition of the SVARmodel, examines the economic effects on unconventional monetary policy of America, it is concluded that its effect on economic recovery is limited, and analyzes the reasonof this empirical result. In the fourth part, start from the theory similarly, analyzes theunconventional monetary policy transmission mechanism and affecting factors of thespillover effect, and then tests the spillover effects to China’s economy by the SVARmodel, the study finds that unconventional monetary policy implementation has anegative influence to China, and the author analyzes the reason of this result, as well.In the fifth part, based on the above theoretical analysis and empirical test results, putsforward feasible countermeasures and suggestions of China’s response to the spillovereffects of unconventional monetary policy.