Abstract: The heterogeneity of inflation expectation results from various abilities of acquiring and processing economic information for different economic subjects. There exist information diffusion and learning effects between superiority and subordinate information subjects. The prerequisite of monetary policy efficiency, thus, is its ability to reflect the superiority information subject’s expectation. This paper, by using Forward-looking Taylor monetary policy reaction function, examines the difference between the actual rate and rule rate in China by choosing public and expert expectations as independent variables and 7-day interbank offering rate as dependent one. The result shows that the ignorance of experts’ expectation may be the primary reason for the lower efficiency of China’s monetary policy in recent years.
Keywords：Heterogeneity; Monetary Policy; Taylor Rule
source:Finance & Trade Economics ,No.3,2013