| As the intermediate target variable of the monetary policy, the money supply has important influence on the scientific decision-making of the central bank. The implementation of monetary supply index can not accurately reflect the amount of money in the economy, so based on endogeneity perspective re-examine the theory of money supply as the intermediate target, provides the basis for judging a financial instrument should be into the index system and adjusting monetary policy to regulate and control the direction has important theoretical and practical significance.Firstly, study the controllability of monetary multiplier and monetary multiplier in China, then prove the present situation of the coexistence of the money supply. Analysis money supply testability theory, monetary policy tools attack to intermediary variables and correlation between money supply and the state of the economy, draws the conclusion: the Central Bank can control money supply and interest rate transmission mechanism is not smooth, the money supply still has an important reference value in China’s monetary policy formulation and implementation process, need be improved in order to improve its effectiveness.To comb the definition of money, this paper selects bond repurchase balance, short-term interest rate debt, commercial bank financial products, offshore RMB, electronic money, private lending as money supply expansion factors,, using Divisia index method to construct a weighted money supply indicators.To test the applicability of corrected the money supply index-DM2. This paper uses 2005-2015 data, constructs the monetary demand function includes real output, price level and the interest rate, using HP filter to employ the non symmetry of the impact of the economic cycle, using the least square method to estimate DM2 and M2 demand functions, draw the conclusion: DM2 is more sensitive to the economic cycle compared to M2, DM2 money demand function is more robust. By constructing the monetary policy impact equation based on 2007-2015 data, using the STR model to examine the asymmetry of economic variables, the results show that the nonlinear relationship between DM2 and monetary policy instruments is more significant. Finally, sets up a VAR model of DM2 and economic operation state to research correlation, then contrast another VAR model contains M2, draw a conclusion: the correlation between DM2 and economic growth, economic growth momentum factors is strong, and the VAR model contains DM2 in predicting GDP and CPI is more accurate.Finally according to the empirical results and the actual situation, this paper puts forward relevant policy recommendations: improve the framework for monetary statistics; play the role of monetary multiplier accurately; control the shock effect external factors to China’s money supply; establish a regulatory framework combined quantity, price and macro Prudential policy; pay attention to market expectation in the regulation; accelerate the pace of economic restructuring and reform. |
