Transition Of Chinese Demand For Money

The theory of demand for money is not only the core of monetary economics theory but also the important component of macroeconomics theory. At the same time it is the cornerstone that monetary authorities carry out macroeconomics regulations. It is not realistic that monetary authorities select interest rate as intermediate target during China's reform marketization of interest rate. Therefore monetary authorities take the quantity of money supply as intermediate target in the long run. However this must take the stable money demand function as the premise. So a stable money demand function is thought to be essential for money policy. Therefore, the economists devote themselves to determine the long-term influencing factors that they can influence the money demand and the stable relations between the influencing factors and the quantity of money supply.China's economic reform starting in 1978 has already passed more than twenty years. Over these twenty years, financial system reform in China has achieved a great success, for instance we have established all kinds of financial organization institutions and multi-financial markets and so on. At the same time, it also appears many puzzled monetary phenomenon such as"missing money"and the drop of the money circulation velocity, etc. The phenomenon leads to that the classic theory of demand for money cannot explain the current money demand. So the domestic and foreign scholars have carried on the revision to the classic theory, or attempted to establish a new theory of demand for money. But when we look over their research, we can find that most of them focus on the theory and empirical of macro-money demand, only few research the theory and empirical of micro-money demand. However, the goal of China's economic reform is to establish the socialist market economy and this require more and more economic agents take part in the economic...