The Asymmetry and Inert Interval Characteristics of Monetary Policy

Ting Wang

《World Scientific Research Journal》 8卷3期 (2022/03) Pp. 395-405

https://doi.org/10.6911/WSRJ.202203_8(3).0048

摘要

Since entering the new era, the Chinese government has repeatedly proposed dual range targets for inflation and economic growth. Therefore, it is of great value to study the reaction model and range preference of China's optimal monetary policy rules. In recent years, the international financial and economic situation faced by China is undergoing profound and qualitative changes in stability, risk, and risk, which makes the research more practical and meaningful. Based on the analysis of monetary authorities' policy preferences, this paper constructs a more general monetary policy response model, and then selects and measures the optimal monetary policy model suitable for China's new era from 64 representative rule forms. Asymmetric adjustment characteristics and lazy interval characteristics for identifying multiple objectives of monetary policy. The research results show that there is an obvious inertial area in China's monetary policy adjustment to inflation, that is, when the inflation rate fluctuates within a small range of the target inflation rate, the interest rate does not respond to the deviation of inflation from the target inflation rate. When the inflation rate deviates from the target inflation rate (that is, the inflation gap) exceeds the inertia region, the monetary authority starts to adjust the interest rate for the inflation gap, and as the inflation gap increases, the interest rate responds to inflation more and more becomes more and more intense, and there is an obvious nonlinear adjustment feature.

關鍵字

Monetary policy rules ； Loss function ； Interval preference ； Generalized method of moments

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