The Research On Monetaryshocks And Tneoutputeffectofinformal Financein China

The velocity of money in monetary theory is an important issue, which reflects a country’s economic operation quality and currency conditions, good or bad. In the analysis of this issue, the reasons for the change in velocity analysis and evaluation of the results already achieved fruitful results, but changes in the velocity of money has the macroeconomic impact of further study. Given the velocity of money on the importance of monetary policy, the velocity of money has not been stable in the case of the velocity of money changes in monetary policy is not only theoretical significance, but also on China’s monetary policy implementation has practical significance. This paper on the relationship between the depth explored in order to raise the majority of scholars of the velocity of money and the relationship between monetary policy and further food for thought. Money supply is endogenous money supply in an economy and the main house by a variety of factors, common decision, the central bank is just one factor, and therefore its money supply alone cannot determine the amount of cash the main micro-economic requirements of commercial banks in the economic cycle, financial situation and balance of payments and other factors affect the money supply in China’s current economic situation, caused by an increase in foreign exchange reserves will change our basic money supply, increasing the money supply endogenous on the independence of the central bank’s monetary policy impact. In addition to the money supply as the monetary authorities to the intermediate target of monetary policy to adjust monetary policy to be effective. However, be pointed out that this control is the framework of the monetary multiplier analysis to be, and therefore the monetary authorities of this controllability is with commercial banks, the game between the public embodied. In order to better play to the effectiveness of monetary policy, monetary authorities need to monetary policy objectives and the commercial banks, the public’s demand for money target coherence.According to China’s existing statistical data, this paper in China since the reform and opening up the velocity of money changes in trends are analyzed and found that its choppy and irregular; followed by the use of Granger causality test method for impact velocity change of China’s currency because the empirical research, the results found to affect long-term decline of monetary velocity of the widening gap between rich and poor factors, the banking system is imperfect, personal and other high propensity to save; in the third chapter in this analysis of the velocity of money in monetary policy impact. Finally, the conclusions based on the velocity of money to improve the status quo of China’s policy recommendations, including speeding up the reform of the banking system, reducing the excess reserve ratio activate idle capital, reducing the gap between rich and poor, by improving the social security system to improve the social and economic expectations, expand consumer active credit market transactions.In this paper, drawing on academic research related to the absorption at the same time, with the national situation, trying to "informal finance" Endogenous money supply of China’s contribution, especially from the point of impact velocity of money, explain the current excess liquidity in domestic currency the underlying causes of circulation, further enrich the theoretical model of endogenous money supply, provide a theoretical basis for monetary policy and reference, and the current model based on the quantity of money M2 to illustrate the applicability and correction. The first part is mainly written, with the economic development of China and the RMB exchange rate undervalued, China’s rapid increase in exports, balance of payments surplus continued to cause a sharp increase in foreign exchange reserves, central bank foreign exchange account for an increasing share of total assets. In order to stabilize the exchange rate the central bank intervention in the foreign exchange market led to an increase in base money. Excess liquidity has become an urgent need to address immediate problems. In this case, the research money supply endogenous and exogenous central bank’s monetary policy implementation and thus the effect is not only able to provide the basis for the implementation of macroeconomic policies also help to influence the public’s inflation expectations, and thus contribute to the suppression inflation, which started from one internal nature of the study. The second part is mainly from the emergence of capital markets and the deepening of financial markets not only affects people’s investment and consumption behavior, but also contributed to changes in the money demand function, to some extent affected the velocity function. And in the foreseeable future, capital markets, the impact of currency will be more significant. These areas as the circulation speed of money to start narrative. The third part is mainly through endogenous to China’s currency and international research background description, lay the foundation for the writing below, in addition to this part through endogenous supply of money Retrospect and Prospect theory description, from the endogenous few aspects of a detailed description, including the adaptation of Marxism, structuralism, liquidity preference point were carried out in well-founded description and analysis of the fourth part of the velocity of money, mainly from the various aspects of detailed analysis and elaboration, which also includes foreign currency in the description of the velocity of the historical background and other aspects of the theory of empirical analysis.