Abstract: During the 13th Five-Year Plan period, one of the key points in the reform of China's macro-control system is the change of monetary policy framework from quantity-based regulation to price-based regulation. The key to this shift is the change of monetary policy intermediary target from broad money supply (M2) to policy interest rate. In view of this, this paper constructs a TVP-S-FA-VAR model to compare the effectiveness of the two in real time, and at the same time factorizes the monetary policy rules under the rational expectations framework. The results find that: price-based intermediation has a more direct effect on the regulation of real economic variables, and the effect is less strong and short-lived, so it reflects more of the function of pre-adjustment and fine-tuning; while quantitative intermediation (M2) The quantity-based intermediary (M2) has a stronger systemic impact on the economic cycle, but converges more slowly, and also has a "crowding-out effect" in the long run, so the monetary authorities should be more cautious in the use of aggregate regulation. Finally, the estimation results of the residual information of monetary policy rules show that when using price-based intermediaries for information extraction, the classical Taylor rule will have about 40% information leakage, on the contrary, the factor expansion cannot significantly increase the information interpretation of quantitative intermediaries. This again suggests that the correlation between quantitative intermediation and real economic behavior is gradually weakening, and it is no longer suitable as a policy intermediation target for macroeconomic control by monetary authorities.

Keywords: price-based monetary policy instruments; quantitative monetary policy instruments; TVP-S-FA-VAR model