Research on the Impact of Monetary Policy on the Market Confidence under the Per-spective of Cross Cycle Regulation:Dynamic Analysis Based on TVP-VAR Model
Improving cross-cycle policy design and counter-cyclical adjustment capacity requires"stabilizing expectations".The paper studies on the confidence that represents the expected core indicators.First of all,the confidence cycle composite index containing various economic subjects is constructed through the dynamic factor model,and then the important role of confidence in macroeconomic operation and monetary policy transmission is analyzed theoretically under the framework of the new Keynesian model.In the empirical part,we use TVP-VAR model to investigate the time-varying characteristics of the influence of confidence on macroeconomic operation and the time-varying influence of different monetary policy controls on confidence.Following the conclusion of the study and implications:First,there is the positive mutual driving effect between confidence and economic cycle,and The Central Bank needs to consider the stability of the confidence system in the design of policy framework.Second,inflation would have a negative impact on confidence,which makes the price cycle deviates from the confidence cycle.But confidence is not the Granger cause for driving the price cycle fluctuation.Third,in the terms of monetary policy,quantity-oriented regulation of loose policy boosts confidence more directly,price-oriented regulation still needs to be improved in"stable expectation".
cross cycle regulationconfidencesteady expectationmonetary policyTVP-VAR model
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