Research On The Influence Of Electronic Money Upon Monetary Policy

The production of electronic money is following precious metal and banknote, the third revolution in monetary history. The electronic money has not only reduced information cost and trade expenses effectively, but also expanded the time and space of trade. At the same time the production and development of electronic money brought new problems and challenges to social economy.The thesis divides into 5 chapters altogether besides conclusions. The part of foreword describes the background, meanings of the thesis and survey of domestic and international research documents. Concerning with the impact of electronic money on monetary policy, there are two kinds of completely contrary views abroad: One kind of them thinks electronic money will cause the extinction of the central bank note and even Central Bank itself finally; The other kind thinks the development of electronic money cannot have heavy impact on the monetary policy of Central Bank. Michael Woodford (2000) putting the two common prerequisite of those two kinds of views to query, thinks that Central Bank can ensure the validity of monetary policy through paying interest to deposit reserve. The great majority of domestic research documents are translation and introduction to the foreign, and there is little innovation.Chapter one is an introduction to electronic money, describing the definition, nature, classification, function and development at home and abroad. The project of electronic money based on smart card is being accepted by people gradually. The project based on Internet or software seldom has a state plan that carries on the test. Compared with developed countries, electronic money in our country still relies mainly on bank card, the credit card only accounts for a few. But the prospect of the bank cards in our country is extremely wide.Chapter two analyzes the impact of electronic money on currency supply and demand. The analysis is separated into two parts according that it is in a short time orlong-term. According to currency supply, the monetary multiplier will become large gradually in a short time, and the base currency will be reduced. The foreign scholar's mathematics model indicates the currency supply will increase, and the lower the rate of deposit reserve is, the wider the range of cash use is, the heavier impact on currency supply of electronic money; In long-term on one hand the appearance of electronic money has dispelled the division of the monetary layers gradually, on the other hand considering the development of electronic money, the velocity will become endogeny and dispersing, which will shaken the prerequisite of monetary multiplier. According to currency demand, the use of electronic money has reduced transaction cost and assets conversion cost in a short time, thus reduced the remaining sum of the currency demand; In long-term definite demarcation among different uses of currency will be moved out, having wavered on the foundation of the traditional currency demand theory. At the same time because the use of electronic money will accelerate the velocity and make the currency demand in an unstable state, It will increase the degree of difficulty to measure currency demand.Chapter three describes the impact of electronic money on monetary policy. This chapter is a subject part of the article. It analyses the impact of electronic money on the independence, goals and tools of monetary policy. Substitution to banknote in circulation and the reserves of Central Bank, it will have a certain impact on seignorage of Central Bank. In a situation that the seignorage drops and causes a large amount of profits to reduce, the independence of Central Bank will receive great influence. The use of electronic money will make it very difficult to separate the monetary policy of one country from other countries', therefore Central Bank will have to carry on relevant coordination with relevant countries to determine the amount of electronic money and carry out monetary policy. The mass use of electronic money will have influence on the measurability and controllability of multiplier, so the interest rate will become the major choice of intermediary goal of monetary policy in the future. Through model of Poole, under the impact of electronic money interest rate is superiorto base currency. But the use of electronic money will strengthen the sensitiveness to the interest rate changes in financial markets, it will put forward higher demand to monetary policy. Seeing from legal deposit reserve, the use of electronic money will reduce the function dynamics and coverage of legal reserve, and bludgeon the prerequisite it works. According to open market operations, the gradual substitution to banknote of electronic money will reduce the scale of the balance sheet of Central Bank, and weaken the prescription and flexibility of open market operation. According to discount, the cheap cost of electronic money will cause market balanced interest rate to drop constantly for a long time, so it will reduce the function space of the fund price of Central Bank.Chapter four analyses the impact of the development of electronic money on currency supply, independence, goals and tools monetary policy in our country.The innovation of the thesis. First, this text analyses the impact of electronic money on currency supply and demand in a short time and long-term. In a short time means electronic money partly replaces banknotes, and banknotes remains main media in circulation; In long-term means electronic money replaces most banknotes and becomes main media. It is a long course and is a replacement from quantity to quality. The division is favorable to analyze the impact on the monetary policy of different stages more clearly. Second, the practice of monetary policy in our country is combining with the analysis. The foreign research on the influence to monetary policy of electronic money is based on the practice in market countries, so it makes a lot of research conclusions abroad not suitable for the transition countries such as our country. Most of domestic study on electronic money is introduction to foreign, and seldom combines with our country. The article tries to combine with our country on the basis of the general theory analysis. It analyses the impact of electronic money on currency supply, the independence, goals and tools of monetary policy in our country.