Abstract:China's economy is facing downward pressure, and asset prices have reached high level at the current stage. It is very necessary and urgent toexplore how monetary policies balance "steady growth" and "risk prevention" in different financial and economic environments. However, the theory of "Financial Accelerator" and "Rational Asset Price Bubble" provide contradictory theoretical basis for the choice of monetary policies. In this paper, principal component analysis method is adopted to construct comprehensive price indexes of Chinese financial assets including stocks, real estate, bonds and funds. By taking the fourth quarter of 2006 to the first quarter of 2020 as the research period,the time-varying relationship among monetary policy, asset prices and economic fluctuation is studied based on TVP-SV-VAR model. This paper provides empirical evidence for the interaction relationship among the above three and the time-varying characteristics of structural shock volatility. The conclusions are as follows:In the general economic environment, China has a "financial accelerator effect", but after asset prices reach a high level, the "rational asset price bubble effect" appears, which means, asset prices will rise as interest rate rises;As time goes by and China's asset price bubble has increased,the effectiveness of the policy transmission channel of "decline in interest rate → growth of macro-economy" is gradually decreasing;In the short run, rise of asset price drives economic growth while severe bubble may dampen growth;The current impliedmacro-control direction is "expanding credit, stabilizing monetary policy and slack fiscal policy".

Key words:monetary policy,asset price,economic fluctuation,TVP-SV-VAR,time-varying effect