Abstract: In recent years, the global economic cycle has shown an obvious acceleration, the varied external environment leads to the effectiveness of quantitative and price-based monetary policies changing with the different economic goals of central banks in different periods, and constant parameter model could not capture the time- varying effects of the quantitative and price-based monetary policies. Therefore, in this paper, we construct a factor-augmented vector autoregressive model with time-varying coefficients and stochastic volatility, analyze the different economic goals＇ three dimensional impulse responses to the quantitative and price-based monetary policies, and construct volatility index to study the effectiveness of quantitative and price-based monetary policies. It is found that, the first, in the period of recession, the PBOC wish to promote economic development, the quantitative monetary policy is more effective if reducing inflation and improving the public economic development are the main aims; the price-based monetary policy is more effective if promoting output, raising the level of employment, promoting private economic and promoting financial market development are the main aims. In the period of prosperous, the PBOC wish to control the economic fluctuation, the price-based monetary policy should be taken if controlling inflation fluctuation and public economic fluctuation are the main aims; the quantitative monetary policy should be taken if stabilizing output fluctuation, employment fluctuation, private economic fluctuation and financial market fluctuation are the main aims. In addition, the volatility component decomposition shows the good nature of the model in this paper, and finds that the shocks of monetary policy in the special periods are the main reason for the fluctuation resulting from macroeconomic regulation of monetary policy.

Key Words: Quantitative Monetary Policy; Price-based Monetary Policy; Economic Growth; Economic Fluctuation; Effectiveness