Signaling Effects,Economic Uncertainty,and the Effectiveness of Monetary Policy
The effectiveness of monetary policy is closely related to the stability of the macro e-conomy.Therefore,a thorough discussion of the effectiveness of monetary policy is of great signifi-cance for achieving China's economical goal of stable growth.By constructing a three-period model incorporating the banking and enterprise sectors,this paper studies the intrinsic relationship between signal effect,economic uncertainty,and the effectiveness of monetary policy,and conducts empirical tests using the instrumental variable partial projection method.The findings show that,first,there ex-ists a signal effect of monetary policy in China,and the monetary policy released by the central bank will affect the public expectations of the economic fundamentals,thus influencing the effectiveness of monetary policy.Second,the loose monetary policy can stimulate economic growth by extending the credit term,however,the existence of the signal effect will weaken the effect of monetary policy on regulating the credit term structure,further reducing the effectiveness of monetary policy.Third,when economic uncertainty intensifies,the signal effect will be amplified,which will further weaken the a-bility of monetary policy to regulate the credit term structure and reduce its role in stabilizing the e-conomy.Therefore,the People's Bank of China should improve its expectation management,increase public confidence in the effectiveness of monetary policy,and at the same time unblock the regulato-ry channels of monetary policy's credit term structure,especially in the context of higher economic uncertainty.
signaling effectseconomic uncertaintyeffectiveness of monetary policy
万方数据
维普
