A Study On The Influence Of Chinese Monetary Electronization On The Speed Of Money Circulation

With the rapid development of science and technology and the popularity of smart phones,electronic payment has achieved rapid development in China in the past decade.In China,the habit of using electronic payment for consumption has been formed.Banks,third-party payment institutions and other organizations vigorously promote the use of electronic payment.And there are government departments to carry out safety supervision,escort,electronic money will become the general trend,its impact on China is also a multi-field,wide range,deep-seated.The research on the influence of electronic money on monetary velocity is helpful to provide theoretical reference for the formulation and implementation of monetary policy,and make monetary policy more in line with Chinas economic reality.The study of electronic money circulation speed is an important reference for Chinas monetary policy formulation and implementation.Because the velocity of money flows is based on different levels of money,However,the high speed and low cost conversion of electronic money between different levels of money makes the current division of monetary levels facing many challenges,which has been greatly different from Chinas economy.This paper is based on the annual data from 1978-2016 and quarterly data from 2002-2016 in the Peoples Bank of China,the National Bureau of Statistics and the wind database.A econometric model is constructed with different levels of currency velocity as dependent variable for both the traditional monetary hierarchy and the monetary hierarchy divided according to the principle of liquidity.In order to explore the impact of electronic money on the speed of money circulation and to what extent it is caused by the division of monetary levels.The empirical results show that the monetary stratification can be divided according to either the traditional monetary stratification or the liquidity principle,In the short run,electronic money will increase the speed of cash,narrow money and broad money,and in the long run,electronic money will make the speed of all levels of money flow down.In the traditional division of monetary levels,the coefficient of the degree of electronic money in the short term is relatively small.It is shown that electronic money has little effect on the velocity of currency circulation,especially on the velocity of cash flow,and the velocity of narrow money circulation is the least.In the long run,the negative impact of electronic money on the velocity of money at all levels is greater,and the negative impact on the velocity of broad money even reaches 55.And in the case of calculating the monetary hierarchy according to the liquidity principle,whether in the long term or in the short term,The absolute value of each coefficient is small,which indicates that the influence of electronic money on the currency level division is also small after removing the influence of electronic money on the currency level division.This shows that the impact of electronic money on the speed of money circulation is to a large extent through the impact of the division of the monetary hierarchy to achieve.Finally,the paper puts forward relevant policy recommendations based on the conclusions.