Abstract: This article makes a test on the asymmetry of inflation cost and the passive area of monetary policy，finding that the Central Bank has an obvious preference for avoiding deflation and has no passive area in its monetary policy control. Then，we employ a TVP-sVAR model under the hypothesis of rational expectation to measure the Center Bank's interest rate rule with different macro backgrounds，finding that the Center Bank tends to strengthen its monetary policy control during a deflation and pay more attention to the persistence of monetary policy in the “New Normal” period，so that make a palm for economic growth and also set aside necessary time for the whole upgrade of economic structure and the reform.

Key Words: Inflation Cost; Welfare Loss; Function of Monetary Policy; Monetary Policy Rule; TVP-S-VAR Model