The Effect of Communication and Action on Monetary Policy Expectation Management: Empirical Evidence from Commercial Banks

WANG Dong-yang; LI Cheng

Volume 38 Issue 1

Jan. 2023

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WANG Dong-yang, LI Cheng. The Effect of Communication and Action on Monetary Policy Expectation Management: Empirical Evidence from Commercial Banks[J]. Journal of Guangdong University of Finance & Economics, 2023, 38(1): 45-61.

Citation:

WANG Dong-yang, LI Cheng. The Effect of Communication and Action on Monetary Policy Expectation Management: Empirical Evidence from Commercial Banks[J]. Journal of Guangdong University of Finance & Economics, 2023, 38(1): 45-61.

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The Effect of Communication and Action on Monetary Policy Expectation Management: Empirical Evidence from Commercial Banks

WANG Dong-yang¹,
LI Cheng²

1.
ICBC Postdoctoral Research Station, Beijing 100031
2.
School of Economics and Finance, Xi'an Jiaotong University, Xi'an 710061, China

Received Date: 2022-06-13
Available Online: 2023-03-09
Publish Date: 2023-01-28

Abstract

Abstract

Scientificmonetary policy expectation management is an important guarantee for adhering to the principle of pursuing progress while ensuring stability. Based on the systematic analysis of the regulation mechanism of monetary policy expectation management, this paper constructs indexes to explore the actual regulation effect of "communication" and "action" in monetary policy expectation management. The findings show that both "communication" and "action" tools can have a significant positive impact on bank credit extension; consistency of communications and actions helps to enhance the regulatory effect of monetary policy expection management, while inconsistency of communications and actions seriously weakens the regulatory effect of "action"; the People's Bank of China's attention to expectation management, increasing the frequency of expectation management and reminding the public to pay attention to expectation signals can significantly improve the regulation effect of expectation management; the effect of "action" is strong in high growth period, but the "communication" is strong in low growth period; the "action" tools of expected management have a significant impact on all types of commercial banks, while the "communication" tools fail to affect the credit extension of local corporate banks. The central bank should gradually improve the policy framework of expectation management, pay attention to keeping communications consistent with actions, cultivate public sensitivity, strengthen communication, pay attention to market signal feedback, so as to effectively deal with the pressure of expectation weakening.
- monetary policy,
- expectation management,
- communication,
- action,
- bank credit

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References(34)

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