Financial Cycles and Monetary Policy: An Empirical Analysis based on McCallum Rule
Zihong Ma, Xi Lin, Yan Yang
Available Online May 2019.
- https://doi.org/10.2991/bems-19.2019.67How to use a DOI?
- financial cycle; monetary policy; McCallum rule.
- Based on the construction of the comprehensive financial cycle index, this paper uses the McCallum rule to empirically test the interaction mechanism between financial cycle and monetary policy. The results show that the interaction between the financial cycle and monetary policy has certain "asymmetry" characteristics; the impact of the financial cycle on the real economy, causing changes in the money supply, and promoting the adjustment of China's monetary policy; at the same time, due to the financial cycle Considering the impact, China's monetary policy has a strong counter-cyclicality in the short term, and the monetary policy control effect based on the McCallum rule is relatively significant. To this end, China must focus on promoting financial reforms focusing on diversification of market entities, orderly market competition, and legalization of financial supervision, so as to better eliminate external shocks caused by financial cycle fluctuations and continuously enhance monetary policy promotion. The effect of real economic growth.
- Open Access
- This is an open access article distributed under the CC BY-NC license.
Cite this article
TY - CONF AU - Zihong Ma AU - Xi Lin AU - Yan Yang PY - 2019/05 DA - 2019/05 TI - Financial Cycles and Monetary Policy: An Empirical Analysis based on McCallum Rule PB - Atlantis Press SP - 381 EP - 388 SN - 2352-5428 UR - https://doi.org/10.2991/bems-19.2019.67 DO - https://doi.org/10.2991/bems-19.2019.67 ID - Ma2019/05 ER -