Speed Of Money Cycling Changing Empirical Research

Monetary policy makers by changing the money supply on China’s macroeconomic regulation and control, it should give full consideration to the situation of the velocity of money, money supply and money velocity work jointly to ensure that the operation of monetary policy to achieve the desired results. On the one hand the velocity of money by a large number of socio-economic factors, it will be the macroeconomic environment and the impact of changes in macroeconomic policy changes; the other hand, changes in the velocity of money monetary policy will affect the economy. However, many scholars have long speed of money but then there are some changes misreading:Some researchers to gross domestic product divided by the value of the money supply as the velocity of money, the speed of money obtained in constant conclusions decline; although there are many researchers believe that the gross domestic product divided by the value of the money supply as the monetary velocity method is wrong, but only consider the virtual economy, financial transactions and other factors, and did not come up with better solution.As social division of labor and the deepening international division of labor, China’s GDP actually far less than our total trade volume of goods and services, so the gross domestic product divided by the value of the money supply as the velocity of money is the wrong way the; velocity of money is on the real economy, although the development of the virtual economy and financial transactions is expanding, but the velocity of money was limited. This does away with the gross domestic product divided by the value of the money supply as the velocity of money the wrong practice, but also draws on the research results at home and abroad, the use of a new method to calculate the velocity of circulation of money. In this paper, the period of1990-2012data to estimate the annual revenue of China’s total annual trade of goods and services, and then divided by the money supply, and ultimately come to compare the real velocity of money. The results showed that the velocity of circulation of money and did not like most researchers think that is declining, but rather to maintain a relatively stable and steadily trend. In this paper, a regression model and the VAR model to the velocity of money and several major economic variables, the relationship between empirical research, the findings indicate that economic theory does not fully explain the change of velocity of money, the velocity of money but also by the level of output and money supply shocks. The results showed that the velocity of money along with the increase in the money supply increases will eventually push prices; it will also decrease as the amount of money supply decreased, played the role of accelerating the drop in prices. Monetary policy makers in formulating monetary policy should take full account of the money supply on the impact velocity of money, so the money supply to meet the needs of economic growth and to maintain the basic stability of prices between selecting an appropriate degree. This paper argues that monetary policy makers of monetary policy if we can publish the information in a timely manner, so that the public abreast of policy developments, we can make the policy objective to minimize the degree of deviation.Structural arrangements, the body of this paper is divided into five chapters. The first chapter is an introduction part, introduced the research background and significance as well as the relevant research results at home and abroad to organize the literature, according to research to make reasonable arrangements for the structure of the article. The second chapter describes the theoretical part describes the selected quantity theory of money and the velocity of money theory, the velocity of money and influence factors analysis. The third chapter is a measure of the velocity of money research component. This chapter describes the speed of money on traditional methods of measurement, pointing out the deficiencies of traditional methods and in accordance with article ideas and research methods for measurement of the velocity of money. The fourth chapter is the empirical part. This chapter uses regression model and VAR model changes affect the speed of money empirical analysis of the factors. Chapter V Conclusions and policy recommendations. The full text of the summary chapter, according to the results of this study monetary policy decisions are made on a reasonable proposal and noted that innovation and inadequate.