Effectiveness of China's Monetary Policy on Controlling Inflation——Empirical Evidence from Samples between July 2005 and September 2008

The results of empirical analyses show that after July 2005 the tight monetary policy is correct in the direction,and is helpful for controlling inflation as well.However,the effectiveness of the tight monetary policy has been undermined largely because of the inertia of inflation and the increasing of funds outstanding for foreign exchange in China.China can improve its monetary policy on controlling inflation only when various economic policies,esp.,monetary policy,financial policy and exchange rate policy are improved and cooperate with each other in the direction,time and force.