Abstract:

Both the 2008 financial crisis and the 2020 coronavirus pandemic have had a severe impact on the U.S. economy. In response to the crisis, the United States adopted a continuous and high-intensity quantitative easing policy. Although this has produced significant support for its economy, it has had a significant impact on the global economy, especially the stable growth of China’s economy has brought challenges. In view of this, it is of great practical significance to discuss the impact of US monetary policy on China’s fixed asset investment price from both theoretical and empirical aspects, and introduce the time-varying TVP-VAR model to test the multiple realistic mechanisms of the impact, so as to further discuss the impact of US monetary policy on China’s economy. The results show that, first of all, the US monetary policy will directly affect the price of fixed asset investment in China, and indirectly affect the price of fixed asset investment through the Chinese stock market. In the indirect transmission process, the impact of US monetary policy on Chinese stock prices has an obvious overshoot effect, and this overshoot effect only exists in the short term. In addition, the mechanism analysis shows that the indirect impact of US monetary policy on China’s fixed asset investment prices will be moderated by the US stock market. Therefore, it is necessary to prudently manage capital flows, promote the process of RMB internationalization, and enhance the service capacity of the financial industry, so as to effectively resist external financial risks and properly respond to various risks and challenges.

Key words: monetary policy, fixed asset investment price, the stock market, overshoot effect