Abstract

We use nonlinear local projection introduced by Òscar Jordà (2005) to estimate and inference the impulse response of monetary policy shocks, the inflation and output responses to monetary policy shocks shown significant nonlinear and asymmetry when they are under different regime of output, inflation and money supply. The empirical results show that the loose monetary policy can promote economic growth in the short term, and does not lead inflation increase in the medium and long term, when they are in the recession, deflation, or tight monetary policy period, so the loose monetary policy is effective in the short-term. While during the economic recovery, high inflationary pressure period, the loose monetary policy cannot promote economic growth in the medium or long term, and will lead the inflation increase, so the current loose monetary policy should change gradually at the right time.

Key words

Monetary Policy; Asymmetry; Local Projection; Impulse Response

         DOI: https://doi.org/10.16699/b.cnki.jqe.2014.01.003