A study of transmission mechanism of monetary policy of China

In the recent two years, transmission jam of monetary policy is an important causing factor that affects the implementation results of China's monetary policy. This article analyzes the five transmission channels of monetary policy in the market economy, and several causes that affect monetary policy transmission mechanism. Also it analyzes the existing problems in China's present monetary policy transmission mechanism, and puts forward some proposals for establishing a monetary policy transmission mechanism, which will place the interest rate as the main channel during the transmission process of monetary policy from direct control to indirect control. Finally some measures and suggestions are given for the reforms and policy making.