Research on the Transformation Mechanism of China's Monetary Policy: Based on the Perspective of International Experience

Research on the Transformation Mechanism of China's Monetary Policy: Based on the Perspective of International Experience


Author:Zhang Yishan, Meng Xianchun, Li Tianyu Journal: Date:

With the gradual deepening of the reform of financial marketization, the effectiveness of quantitative monetary policy rules has weakened significantly, and it is imperative to build a price-based monetary policy control system with interest rates as the core. In this context, this paper first comprehensively analyzes the transition practice of monetary policy in emerging market economies and developed economies, then derives the optimal price monetary policy rules under the new Keynesian framework, and finally conducts empirical research on emerging market economies and developed economies based on international data, and compares them with China. The results show that: first, the smoothness of China's monetary policy is weak, especially the gap with developed economies is large, it has strong camera selection characteristics, and there are short-term fluctuations in interest rates, which is not conducive to guiding the market to form stable expectations; Second, China's monetary policy shows the characteristics of overly targeting the economic growth target and not responding to the inflation target, which affects the credibility of policy implementation; Third, in the post-crisis period, the regularity and forward-looking nature of China's monetary policy have been improved, which provides favorable conditions for the transformation to a price-based monetary policy regulatory framework, but in the future policy transformation practice, more attention should be paid to the short-term volatility of interest rates, weaken the focus of monetary policy on economic growth targets, improve the independence and credibility of central bank policies, effectively guide market expectations, and strengthen the forward-looking policy.

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