Abstract: Based on the perspective of individual asset allocation under loose monetary policy, through constructing the dynamic stochastic general equilibrium model with the wealth income gap family sector and the innovation heterogeneity enterprise sector, this paper draws some conclusions:(1) Loose monetary policy stimulates the rise of real estate and financial assets prices and yields. As the prices of real estate and financial assets rise, most of the incremental currency flows to traditional enterprises and is allocated to real estate and high-risk financial assets. (2) High-income residents' demand for asset allocation provides strong support for asset structure adjustment. (3) In this process, some traditional enterprises that should have been eliminated by the market still linger around, making it hard for innovative companies to benefit from loose economic policies and break away from prolonged low-speed growth. (4) After the credit monetary system replaces the gold standard monetary system, the loose monetary policy weakens market exit mechanism.

Key words: monetary policy, enterprise innovation, asset allocation