An Empirical Research On The Development Of E-money’s Influence To Monetary Supply And Demand

As the result of nowadays rapid development of computer network，the form of money ischanging gradually. This new trend of information technology gives birth to E-money, orelectronic money. Compared with traditional currency, this kind of money not only circulatesmuch more convenient and faster, but also can be exchanged anytime and anywhere. Along withthe extensive application of the E-money, governments and scholars all around the world arenow initiating intense and full-scale study on both it and its related policies. However, in the caseof its extensive use, it is now exercising significant influence on overall economic system, andcould probably bring forth some financial risks. Therefore, some nation’s central bank are nowintroducing some currency policies on how to controlling it. And only an in-depth andcomprehensive study can lead to a correct currency policy.This paper on the base of the E-money domestic and international research focuses on theanalysis of E-money on monetary demand and supply effect with theoretical and empiricalmethod. On the theoretical research, through the analysis of E-money’s advantages, as well ascurrency users holdings motivation, it conclude that the E-money has an important influence onmoney demand in China; On the monetary supply analysis, due to the money multiplier isvulnerable to be influence by economic environment, central bank is very difficult to carry on thecontrol, while the emergence of E-money made certain impact on monetary multiplier,so thearticle is focused on the study of electronic money on monetary multiplier effects with theempirical analysis method, establishing the model between E-money and monetary multiplier. Inthe empirical analysis, this paper uses the sequence of stationarity test, cointegration test anderror correction model method, gets our country E-money and monetary multiplier has importantrelevance and long-term stable proportional relationship. Finally according to the nationalconditions of our country and the development of E-money status, the paper gives therecommendations for Central Bank.On the research, this paper gets the following conclusions: E-money made that people’s theliquidity preference weakened and financial assets transformate between each other more easier,people weakened the demand on money. E-money’s endogeneity made money supply controlmore difficulty; at the same time, the money multipliers have certain effect on it. Electroniccurrency and financial electron are going to enhance continually, at the part of the effecting onmonetary multiplier, electronic currency impact stronger than the financial electronic.