The Empirical Research Of The Impact Of Money Supply On The Price Of China Stock Market

China Stock Market has developed for 25 years since it established in 1991.In this period,this market has a rapid development and effected by the years.With the time goes by,China Stock Market has been an important financial market of the China Economy Market.And it makes a great contribution to raise the increasing of GDP.In general,through change the money supply,the monetary policy will affect the price of stock.The money supply became an important element which touch the stock market,as a major regulation target of China monetary policy.In recent years,the relationship of stock price with monetary policy is turning into a hot topic in monetary theory.This relationship has significant to help make the monetary policy correctly and prevent the shock by stock price fluctuation frequently.Under a known long-term market,qualitative research as well as quantitative analysis by the effect of money supply on stock price will help to make monetary policy available.And it could increase the investment effectiveness as well as keep the market operation.The purpose of this paper is through the different time span respectively to investigate degree of impact on stock prices in the money supply by two market crash in the period of 2007 to 2016.First of all,on the basis of the existing literature,and gradually to comb the money supply affect the stock price of the relevant theoretical research,analyses the existing theory,on the basis of macro theory,step by step in this paper,the transmission channels of monetary policy for the stock market,discussed from different aspects.And then,by using the method of descriptive statistics to study the different time interval,and different currencies under the level of money supply and the correlation of stock prices.At the same time,using the ADF test and co-integration test,granger causality test,impulse response and variance decomposition and VAR model measuring method,studies the two crash time,different time span in the different levels of currency supply impact on stock prices have what distinction,where specific differences.The result shows that the money supply and stock prices has the long-term equilibrium relationship,the different levels of currency supply impact on stock index is also different.The cash with quasi-money has no effect on stock index.But the unit of currency deposit has a notable effective.From the perspective of the study of periodic,two crash time,different time span,the money supply and the impact of the liquidity of stock prices have slightly difference.Finally,according to the results of the empirical study of the full text is summarized,and from the perspective of perfecting the information transfer mechanism of the stock market advice to strengthen the construction of the stock market itself and strengthen information supervision,advice to establish the real market interest rates system at the same time,and under the framework of the regulatory system,puts forward some proposals of protection of rights and interests of small and medium-sized investors.