The Financial Asset Price and the Conduct of Monetary Policy

With the development of financial market especially the capital market, the fluctuation of asset price plays a more and more important role in the conduct of monetary policy. The paper tried to illustrate the relationship between monetary policy and asset price on the base of BGG model, examine how the asset price conducts monetary policy through consumption, investment, financial institution and financial system. It also took an empirical analysis on transmission effect of monetary policy via asset price in China, and regarded it much important to set up a broader price index including asset price as the ultimate goal for monetary policy.