Monetary Policy Transmission Mechanism Through Stock Market: A Theoretical Retrospect and its Enlightenments

There is an interactive relationship between stock market and monetary policy. Stock market has been a practical and increasingly important channel of monetary transmission and an essential component of efficient monetary transmission mechanism. Stock market in China is still on its preliminary stage, its disequilibrium and abnormality leads to the low efficiency of monetary policy transmission. In the new financial situation, a new monetary policy structure should be established to adjust to the stock market development on one hand, and all kinds of effective measures should be employed to promote the efficiency of monetary policy transmission on the other hand.