The 10th Academic Luncheon of the Digital Technology and Finance

Abstract:

In recent years, the central bank has stressed the need to balance "stable growth" and "risk prevention" in monetary policy regulation. Based on the high-frequency identification method, this paper firstly divides the Chinese monetary policy shocks into two dimensions: traditional shocks and signal shocks, further tests the specific impacts of different dimensions of monetary policy regulation on GDP growth and financial risks, and reveals the multiple effects of Chinese monetary policies. On the one hand, loose monetary policies have significantly different two-tier impacts on achieving "stable growth". The traditional impact of loose monetary policy not only has obvious counter-cyclical regulation effect, but also shows a certain cross-cyclical regulation function, which can effectively alleviate the current and future 3-9 months of economic downward pressure. And the signal impact of loose monetary policy will increase the public's pessimistic expectations for economic prospects, resulting in the increase of economic downside risk. On the other hand, while achieving "stable growth", loose monetary policy will also lead to the rise of financial stress index and increase the difficulty of "risk prevention". At this time, strengthening macro-prudential policy can effectively avoid the rise of financial risks. The conclusion of this paper has certain policy implications for Chinese central bank to strengthen counter-cyclical and cross-cyclical coordination of monetary policy, and to achieve the balance between "steady growth" and "risk prevention".

Speaker Introduction:

Li Li, Doctor of Economics. His research interests include macro finance and monetary policy, econometrics theory and application, etc. He has published several papers in journals such as Economic Research, Financial Research and Quarterly Journal of Economics. His research achievements have been awarded the first prize of Tianjin Social Science Outstanding Achievement Award and other provincial and ministerial level awards. He presided over national-level projects such as the Youth Program of the National Natural Science Foundation of China.