What is the impact of monetary policy on the stock market? Let's introduce it.
Monetary policy is also an important part of the national macroeconomic policy, and also serves to promote the stable development of the economy. It is a kind of policy means that the central bank uses its own tools such as interest rate, exchange rate, credit, currency issue, foreign exchange management to adjust relevant variables and ultimately affect the whole national economic activities. Like fiscal policy, monetary policy also reflects the government's financial management of the national economy, but this part of financial resources mainly refers to the financial resources represented by bank credit. In addition, monetary policy does not reflect the distribution and management of some social products as fiscal policy does. Therefore, there are similarities and differences between monetary policy and fiscal policy.
① Monetary policy objectives. The goal of monetary policy, also known as the ultimate goal of policy, refers to the ultimate goal of monetary policy regulation. The formation of monetary policy objectives has gone through a long time, from the initial price stability to the four goals generally recognized by all countries in the world today: price stability, full employment, moderate economic growth and balance of payments. As mentioned above, these four objectives are also the main contents of fiscal policy objectives.
② The intermediate goal of monetary policy. The regulation of monetary policy on economic operation is an indirect control, which can not directly affect the actual economic activities, but must achieve its ultimate goal through a certain intermediate goal. Therefore, we must select certain intermediate targets as the direct adjustment purpose of monetary policy, and at the same time, we can also use these intermediate variables as indicators to reflect the operation effect of monetary policy. Intermediate target is a very important transmission link in the whole process of monetary policy implementation.
To select the intermediate target of monetary policy, we must adhere to certain principles, that is, a suitable intermediate target must be closely related to the ultimate goal of monetary policy, namely, the stability of national income, which can be controlled by the central bank, and can quickly play a role in declaring the intention of monetary policy. At present, the intermediate targets put forward by various countries are interest rate, money supply, total loans, monetary base, stock price, etc., but only interest rate, money supply and total loan amount can be generally recognized. These three indicators can better reflect the above principles, and have good adaptability with economic and financial systems, so they are widely used in the operation of monetary policy. Interest rates are covered in the next section, where money supply and total loans are briefly discussed.
First, money supply. The most fundamental goal of monetary policy can be summed up as providing a good monetary environment for a country's economic development. Under the condition of modern credit standard, the change of money supply will have a direct impact on the balance between the total social supply and social demand, thus affecting the operation of the whole macro-economy. Therefore, in order to prevent the money supply from becoming the source of major economic fluctuations and not to destroy the normal operation of the whole national economy, monetary policy must be formulated according to the general supply and demand of society. One of the important tasks of monetary policy is to maintain a moderate money supply, and not to cause excessive prosperity or long-term recession because of excessive or insufficient money.
The so-called moderate money supply requires both quantity and quality, which is mainly reflected in the following aspects: first, in the case of insufficient total social demand. At this time, the whole social economy is in recession or depression, a large number of resources are idle, enterprises are insufficient to start work, and social and economic development is stagnant. At this time, the monetary policy of the central bank should be expansionary, that is, to increase the money supply to stimulate the increase of total demand, so as to promote the recovery and development of production, and to make the total social supply and demand tend to balance.
Second, when the total social demand is too much. At this time, the macro-economy was overheated, production was developing rapidly, investment was increasing sharply, market supply was insufficient, too much money was chasing too few commodities, and prices were rising. At this time, the monetary policy of the central bank should be tightening, that is, reducing the money supply, restraining the total social demand, promoting the moderate and stable economic growth, and promoting the balance of the total social supply and demand.
Third, the composition of social aggregate supply and aggregate demand is not suitable. At this time, the macro-economy is in such a situation: some sectors have insufficient demand, relatively surplus goods, and production is stagnant; in other sectors, demand is excessive, commodity supply exceeds demand, and prices rise, and production develops rapidly. As a result, the proportion of the overall economy will be out of balance and abnormal development. At this time, the monetary policy should be tight and loose, and the combination of looseness and tightness should be adopted. By adjusting the composition and flow direction of money supply, the situation that the composition of social aggregate demand and that of aggregate supply and demand are incompatible should be changed, so as to ensure the coordinated development of the national economy.
Monetary policy is also an important part of the national macroeconomic policy, and also serves to promote the stable development of the economy. It is a kind of policy means that the central bank uses its own tools such as interest rate, exchange rate, credit, currency issue, foreign exchange management to adjust relevant variables and ultimately affect the whole national economic activities. Like fiscal policy, monetary policy also reflects the government's financial management of the national economy, but this part of financial resources mainly refers to the financial resources represented by bank credit. In addition, monetary policy does not reflect the distribution and management of some social products as fiscal policy does. Therefore, there are similarities and differences between monetary policy and fiscal policy.
① Monetary policy objectives. The goal of monetary policy, also known as the ultimate goal of policy, refers to the ultimate goal of monetary policy regulation. The formation of monetary policy objectives has gone through a long time, from the initial price stability to the four goals generally recognized by all countries in the world today: price stability, full employment, moderate economic growth and balance of payments. As mentioned above, these four objectives are also the main contents of fiscal policy objectives.
② The intermediate goal of monetary policy. The regulation of monetary policy on economic operation is an indirect control, which can not directly affect the actual economic activities, but must achieve its ultimate goal through a certain intermediate goal. Therefore, we must select certain intermediate targets as the direct adjustment purpose of monetary policy, and at the same time, we can also use these intermediate variables as indicators to reflect the operation effect of monetary policy. Intermediate target is a very important transmission link in the whole process of monetary policy implementation.
To select the intermediate target of monetary policy, we must adhere to certain principles, that is, a suitable intermediate target must be closely related to the ultimate goal of monetary policy, namely, the stability of national income, which can be controlled by the central bank, and can quickly play a role in declaring the intention of monetary policy. At present, the intermediate targets put forward by various countries are interest rate, money supply, total loans, monetary base, stock price, etc., but only interest rate, money supply and total loan amount can be generally recognized. These three indicators can better reflect the above principles, and have good adaptability with economic and financial systems, so they are widely used in the operation of monetary policy. Interest rates are covered in the next section, where money supply and total loans are briefly discussed.
First, money supply. The most fundamental goal of monetary policy can be summed up as providing a good monetary environment for a country's economic development. Under the condition of modern credit standard, the change of money supply will have a direct impact on the balance between the total social supply and social demand, thus affecting the operation of the whole macro-economy. Therefore, in order to prevent the money supply from becoming the source of major economic fluctuations and not to destroy the normal operation of the whole national economy, monetary policy must be formulated according to the general supply and demand of society. One of the important tasks of monetary policy is to maintain a moderate money supply, and not to cause excessive prosperity or long-term recession because of excessive or insufficient money.
The so-called moderate money supply requires both quantity and quality, which is mainly reflected in the following aspects: first, in the case of insufficient total social demand. At this time, the whole social economy is in recession or depression, a large number of resources are idle, enterprises are insufficient to start work, and social and economic development is stagnant. At this time, the monetary policy of the central bank should be expansionary, that is, to increase the money supply to stimulate the increase of total demand, so as to promote the recovery and development of production, and to make the total social supply and demand tend to balance.
Second, when the total social demand is too much. At this time, the macro-economy was overheated, production was developing rapidly, investment was increasing sharply, market supply was insufficient, too much money was chasing too few commodities, and prices were rising. At this time, the monetary policy of the central bank should be tightening, that is, reducing the money supply, restraining the total social demand, promoting the moderate and stable economic growth, and promoting the balance of the total social supply and demand.
Third, the composition of social aggregate supply and aggregate demand is not suitable. At this time, the macro-economy is in such a situation: some sectors have insufficient demand, relatively surplus goods, and production is stagnant; in other sectors, demand is excessive, commodity supply exceeds demand, and prices rise, and production develops rapidly. As a result, the proportion of the overall economy will be out of balance and abnormal development. At this time, the monetary policy should be tight and loose, and the combination of looseness and tightness should be adopted. By adjusting the composition and flow direction of money supply, the situation that the composition of social aggregate demand and that of aggregate supply and demand are incompatible should be changed, so as to ensure the coordinated development of the national economy.
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