Core Viewpoint - The article discusses the mechanisms through which monetary policy influences inflation expectations among economic agents, emphasizing the importance of managing these expectations for achieving price stability [1][2][14]. Group 1: Monetary Policy Channels - The central bank influences inflation expectations through two main channels: "listening to words" (communication and transparency) and "observing actions" (quantitative and price-based monetary policies) [2]. - Trust in the central bank is crucial for economic agents to accept its information, which relies on the effective use of monetary policy tools [2]. Group 2: Immediate and Dynamic Effects of Monetary Policy - Differentiating the immediate and dynamic effects of monetary policy on inflation expectations helps the central bank manage these expectations more precisely [3]. - The study finds that residents' inflation expectations are influenced by both current and lagged monetary policy variables, indicating a need to consider both immediate and dynamic impacts [3][10]. Group 3: Formation Mechanisms of Inflation Expectations - The article explores the formation mechanisms of inflation expectations using adaptive learning theory and sticky information theory, establishing models for both residents and experts [4]. - The analysis includes a four-variable VAR model to study the dynamic effects of monetary policy on inflation expectations, incorporating real output growth, actual inflation rates, and monetary policy indicators [4][11]. Group 4: Data and Methodology - The empirical analysis covers macroeconomic variables such as GDP growth, CPI growth, and effective exchange rates from Q4 2000 to Q1 2023, alongside monetary policy variables [5][6]. - The study utilizes GMM estimation to address endogeneity issues in the analysis of inflation expectations [7]. Group 5: Immediate Impact of Monetary Policy - The results indicate that CHIBOR, SHIBOR, and the growth rate of base money have significant immediate negative impacts on residents' inflation expectations [8]. - For experts, the growth rate of base money shows a significant negative immediate impact, while M1 and M2 growth rates have significant positive immediate effects [8][10]. Group 6: Dynamic Impact of Monetary Policy - The VAR model analysis reveals that SHIBOR, base money growth, and M1 and M2 growth rates have significant dynamic impacts on residents' inflation expectations [12]. - After Q1 2011, only SHIBOR and DR007 significantly influence inflation expectations, indicating a shift towards price-based monetary policy [13][17]. Group 7: Conclusion and Implications - The findings suggest that the effectiveness of monetary policy is closely linked to its ability to influence inflation expectations, highlighting the need for improved understanding of these mechanisms [14][17]. - The transition from quantity-based to price-based monetary policy has altered the dynamics of how inflation expectations are formed, with price-based tools becoming increasingly central [17].