Abstract: The implementation of the central bank's monetary policy is constrained by the monetary policy environment. Especially when implementing price-based monetary policy, the central bank may choose different interest rate regulation modes under different interest rate environments. Therefore, this paper empirically tests the dependence of monetary policy control mode and interest rate zone system by constructing a threshold regression model. It is found that there are significant differences between the central bank's policy preferences and interest rate regulation modes in different interest rate zones. In the high interest rate zone system, the central bank has a policy preference for adjusting the nominal interest rate for the output gap; in the low interest rate zone system, the central bank does not have such policy preference, and the weakening or even failure of the monetary policy effect in the low interest rate environment is the result of this zone. The main reason why the central bank does not adjust interest rates for output gaps.

Key words: Hreshold model ; rate regime ; monetary policy