An Empirical Study On Inflation Effect Of Electronic Money In China

With the improvement of society and productivity,the form of money is gradually evolving.Now,a new form of money-electronic money is impacting every aspect of our life.E-money brings many benefits to our lives,for example,it improves the efficiency of our payment and settlement.Under this background,the third party payment arises,and the third-party payments also let electronic money go into thousands of households.Third-party payment has the characteristics of convenience,low cost and relative safety,which deeply affects people's payment habits.Of course,the emergence of this new form of money and payment will bring a series of problems and challenges to our socio-economic life.According to the research of past scholars,we can find that the change of payment and settlement form will affect the monetary system and the inflation of a country.Since the establishment of Alipay in 2005,China's electronic money and third-party payment has developed rapidly.In recent years,in particular,third-party mobile payments have grown exponentially.Under these circumstances,How will third-party payment affect Chinese monetary system?This paper will use theoretical and empirical research and study the impact of third-party payments on currency multipliers,transaction velocity of money and inflation.The research process is as follows:firstly,we will analysis the impact of third-party payments on currency multipliers,transaction velocity of money and inflation by theoretical research.Next,we will use empirical research.Due to the short statistical time and the insufficie of third party mobile payment data in China,the third party Internet payment data will represent the third party payment data.This paper weill use the Granger causality test,the co-integration test and the VEC model for impulse response analysis to analysis the impact of the third party payment on currency multipliers,transaction velocity of money and inflation.Finally,according to the results of this paper,put forward some policy recommendations.Through the empirical study of this paper,we have the following conclusions.First,the third-party payment have a positive impact on both broad and narrow currency multipliers in long time.Second,the third-party payment will speed up the broad transaction velocity of money and slow down the narrow transaction velocity of money.Third,the third-party payment reduce the inflation in China corrently.