The Research In The Factor Decompose Model Of Money Supply

Money is not only the means of payment and medium of exchange but also the assets in social reproduction circulation, which plays an important role in the economic stability and economic growth. So the research in the factor decompose model of money supply is of great importance on how to control the money supply according to economic growth.This paper is based on the summarization of the related theories about money supply. It analyses the working mechanism of money supply from the following angles: the evolving process of the forms of money, the layers and the system of money supply. Then the paper investigates the influential factors of money supply from the view of social economic indices. To analyze the influential factors of money supply, this paper mainly uses four macroeconomic indices: gross domestic production, foreign exchange reserves, national bond prices and stock prices.This paper tries to explicate the influential factors of money supply in three aspects. Firstly, it analyses the degree of influence to money supply by the above indices respectively. Secondly, it gets the degree of influences of each factor by means of integrative study. Finally, this paper puts forward political suggestions based on the results of empirical studies.