Proceedings of the 1st International Conference on Business, Economics, Management Science (BEMS 2019)

Financial Cycles and Monetary Policy: An Empirical Analysis based on McCallum Rule

Authors
Zihong Ma, Xi Lin, Yan Yang
Corresponding Author
Zihong Ma
Available Online May 2019.
DOI
https://doi.org/10.2991/bems-19.2019.67How to use a DOI?
Keywords
financial cycle; monetary policy; McCallum rule.
Abstract
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.
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Proceedings
1st International Conference on Business, Economics, Management Science (BEMS 2019)
Part of series
Advances in Economics, Business and Management Research
Publication Date
May 2019
ISBN
978-94-6252-720-1
ISSN
2352-5428
DOI
https://doi.org/10.2991/bems-19.2019.67How to use a DOI?
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
BT  - 1st International Conference on Business, Economics, Management Science (BEMS 2019)
PB  - Atlantis Press
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  -