The Choice,Comparison and Impact of Optimal Monetary Policy in China:Empirical Study Based on Hybrid New Keynesian Model

By constructing and estimating a hybrid new Keynesian model,this paper tests the type of optimal monetary policy in China for the first time and systematically compares the effects of discretion-based and precommitment-based monetary policies on Chinese economy.It comprehensively uses maximum likelihood estimation method,counterfactual simulation,likelihood ration test,Bayesian information criterion,a comparison of the second-order moment and impulse response to arrive at the conclusions as follows:firstly,the monetary policy implemented in China is not significantly different from optimal monetary policy,and optimal monetary policy in China is discretion-based monetary policy;secondly,discretion precommitment-based monetary policies and optimal Taylor rule take output stability as the most important goal of monetary policy,followed by inflation stability;thirdly,compared to precommitment,discretion-based monetary policy leads to more obvious output and inflation instability and more losses of social welfare in China;fourthly,as for monetary policy control in China,optimal Taylor rule can be a good approximate of or a sound substitute for precommitment-based monetary policy.