Research on the Impact of Foreign Exchange Reserves on the Effectiveness of China's Monetary Policy from the Perspective of Marxist Economics

It is a kind of inertial thinking that academics habitually use the theories and models of western economics to answer the impact of foreign exchange reserves on the effectiveness of China's monetary policy. In fact, any kind of economic phenomenon can be solved by the theory of Western economics or by the theory of Marxist political economy. There is no fixed research paradigm. As a socialist country, China has established a socialist market economy system. Marxist political economy theory can give a new explanation to China's current economic problems and provide new solutions. This study proposes a new research perspective and ideas: (i) using Marx's monetary theory to analyze the impact of foreign exchange reserves on money supply; (ii) using Marx's national debt theory to analyze the effectiveness of sterilization intervention policies in China; (iii) Using Marx's exchange rate theory to analyze the influence of foreign exchange reserves on the transmission mechanism of monetary policy; (iv) using Marx's monetary theory and national debt theory to analyze the impact of foreign exchange reserves on inflation. This new research idea attempts to make a new interpretation of the effectiveness and ineffectiveness of monetary policy and propose actionable policy recommendations.