Based on the data of the inflation gap and output gap，interest rate and money supply in January 1996 -June 2016，this paper mainly analyzes the reaction characteristics and control mode of the monetary authority by using LT-TVP-VAＲ model． The conclusion is that the dependency relation of China＇s monetary policy and inflation gap and output has a threshold effect，the central bank has asymmetric preference，“price” monetary policy to avoid the output contraction preference，“quantity” monetary policy has weak preference to avoid deflation． As far as the effect is concerned，the“price”policy is better than the deflation effect，and the“quantity type”policy is better to control inflation，stimulate output growth and restrain economy overheating．Finally the paper puts forward three policy suggestions in the period of“new normal”．

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