An Empirical Study On The Influence Of Network Electronic Money On The Currency Circulation Process

Since the beginning of the new century, technological progress has led to the development of electronic money, especially payment to the internet as the main representative, which can not be compared with the super time and space, convenience and low cost advantage, profoundly changing people’s payment behaviors. The vigorous development of online banking continues to improve the permeability of electronic currency, currency exchange media from traditional paper gradually transfering to the digital transactions.causing the traditional monetary supply and demand theory applicable to the environment changes, monetary theory suffers severe challenges. And the change of monetary theory directly affects the central bank of China’s monetary policy effectiveness and financial system stability, rapid circulation of electronic money making money demand and supply factors rather than a single, monopoly of the central bank’s monetary issue right and supervision experiencing the severe challenges.the era of network currency makes monetary issue further privatization, and the development of network electronic money will affect the stability of the financial system. From the point of view of money demand and money supply, the study on the relationship between monetary velocity and money multiplier and network eletronic money has important theoretical and practical significance for the understanding of the network electronic money and the rich monetary theory.Monetary theory can be divided into money demand and money supply, this article using theoretical and empirical research are standard. From the point of view of money demand, the author mainly studies the network payment and money circulation velocity in the empirical research using VECM Model and analyzes the relationship between the network electronic money and money circulation velocity using the quarterly data in 2000-2014 indicator selection main choice of network payment activity, real interest rates, income, the degree of financial modernization and explanatory variable velocity.In the empirical study, the currency circulation velocity, network payment and other variables are used in the unit root test, cointegration test and Grainger causality test. Finally, the impulse response analysis of VECM Model is carried out. Results show that long-term view of online payment development on monetary velocity has a positive effect, and the short term still has a negative effect, analysis is mainly electronic money’s substitution for currency acceleration effect and substitution transformation effect, long term substitution accelerating effect is greater than the substitution transformation effect, so currency circulation circulation rises, short-term is the opposite. Starting from the perspective of monetary supply, active degree and monetary multiplier three indexes of the cash leakage rate, network payment. In the empirical process using VAR model and the related variables is the impulse response function analysis and variance decomposition, research results and theoretical derivation similar, network support to pay in the long and short of money multiplier has a positive effect. From two angles of interpretation for the network payment development that speeds up electronic currency currency substitution, cash leakage rate is reduced, accordingly enhances the monetary multiplier; The money multiplier promotion in the result of Pay network reducing the deposit reserve. Finally, puting forward suggestions on the study results, there are three main aspects:(a) Paying attention to studying on the relationship and influence mechanism between the Internet banking and traditional monetary theory;(b) Taking the network payment considerarion into monetary policy regulation and the operation mechanism;(c) Developing and improving relevant laws and regulations of online payment supervision.