Study On The Effect Of Monetization On Economic Growth Of China's Economic

M2/GDP is commonly used internationally as an indicator to measure the degree of a country's economic monetization.This indicator was first proposed by McKinnon.According to the definition of traditional economic monetization,the level of monetization generally cannot exceed 1.But since the reform and opening up,with the rapid economic development,the level of monetization has increased to 2.02.At present,there are many explanations for the abnormally high land ratio,but most of them are analyzed from the perspective of the total amount,such as currency problems,monetization process,high savings rate,etc.,and little attention is paid to the relationship between economic monetization and economic growth.China's economic development has entered a new normal a few days ago.Economic growth has moved from high-speed growth to high-quality growth.The economic structure has begun to adjust,and the role of currency in economic growth cannot be underestimated.Therefore,it is more economical to discuss the relationship between economic monetization and economic growth.Whether the level of monetization is reasonable will directly affect China's macroeconomic development.Based on theoretical analysis and empirical research,this paper analyzes the close relationship between China's economic monetization and economic growth from the national and regional levels.The national level uses 1952-2018 data to study the correlation between economic monetization and economic growth.At the level,China's provincial data is used for panel data for a total of 25 years from 1994 to 2018,and the dynamic GMM model and dynamic threshold model are used to empirically study the impact of economic monetization on economic growth.First,sort out the relevant research results and theories at home and abroad,and use this as the basis for the research.Through logical analysis,the previous scholars will comprehensively summarize and discuss the research on the economic growth effect of economic monetization,including the definition of related concepts and economic currency.The formation mechanism of economicization and the impact mechanism of economic monetization on economic growth,etc.;Secondly,a longitudinal historical analysis of China's economic monetization level,and then horizontal comparison with other countries,the macroeconomic growth variables from the overall and regional level Trend analysis to discuss the preliminary relationship between the two;then,empirical verification from the national and regional levels based on real associations;the end of this article is to summarize the research results,and analyze the consistency or difference between theory and practice,and put forward Corresponding policy recommendations.Through the summary of the full text,the research conclusions obtained in this article are:(1)Theoretical research shows that:economic monetization has a positive effect on economic growth by improving economic efficiency and reducing transaction costs.However,as the level of economic monetization increases,the rate of economic growth will slow down,or even have a negative effect.A reasonable level of monetization is a necessary condition for the stable growth of the real economy.The use of economic monetization can reduce transaction costs and promote economic growth,while excessively high economic monetization will generate inflation and slow the economic growth rate.Through theoretical analysis,it is found that the impact of economic monetization on economic growth in reality is often non-linear.It will slow down the rate of economic growth as the currency level increases.Only by maintaining a reasonable monetization interval,can we effectively promote economic stability.(2)Empirical research indicates that:economic monetization has a significant positive effect on economic growth.This article is divided into two levels to verify the impact of economic monetization on economic growth.First of all,the time series method is used to explore the correlation between economic monetization and economic growth at the national level.Then,the dynamic panel model is used to test the economic monetization on the economy by region.The impact of growth,and finally the dynamic threshold model is used to test the nonlinear effect of economic monetization on economic growth.The empirical conclusions obtained in this paper are as follows: Firstly,from a national perspective,there is a relationship between economic monetization and economic growth.The VAR model shows that there is a significant correlation between economic monetization in the narrow sense and broad monetization and economic growth.Over time,the explanation of economic monetization for economic growth has gradually increased,but economic currency the interpretation of M2 P is stronger.Secondly,there is a significant positive correlation between economic monetization and economic growth.The results of the dynamic panel show that from the national perspective,the coefficient of influence of economic monetization on economic growth is 0.1551.If the economic monetization increases by 1 percentage point,economic growth will increase by 0.1551 percentage points.This article is divided into three aspects of east,middle,and west.It is also found that economic monetization has a significant positive effect on economic growth,but the effect in the east is the strongest.Since the eastern economy is more developed than the central and western regions,it is in line with reality.Third,there is a non-linearrelationship between economic monetization and economic growth.Threshold effect regression results show that in a low level of economic monetization,that is,when the ratio is lower than the first threshold of 1.9725,the impact of economic monetization on economic growth is significantly positive,and the impact coefficient is 0.2144.When the value is lower than the first threshold,when the level of monetization gradually expands,the scope of currency also gradually expands.At this time,the function of currency is strengthened.The state will use monetary form and monetary policy to intervene or adjust macroeconomics,and then Properly allocate resources to promote economic growth.When the economic monetization crosses the first threshold of 1.9725,the impact of economic monetization on economic growth weakens,with an impact coefficient of 0.1215,which is significant at a statistical level of 1%,that is,when the ratio is greater than 1.9725,the economic monetization The positive effects of economic growth have gradually weakened.The policy recommendations extracted from the above research conclusions in the full text are:(1)establishing a benign endogenous money supply mechanism;(2)maintaining an appropriate money supply;(3)accelerating the transformation of savings-investment;(4)encouraging finance Business innovation and system innovation.