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Money Demand Function In Economic Transition And Open Economy: Positive Study From China

Posted on:2005-05-17Degree:DoctorType:Dissertation
Country:ChinaCandidate:X J YiFull Text:PDF
GTID:1116360125467602Subject:Quantitative Economics
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At first, this paper makes a survey of the development of money demand theory and positive analysis after Keynes, inferring from the survey the factors that influence the demand for money in China and the model which we should choose to estimate the money demand function in China. Then, from the point of view of institutional analysis, this paper studies how the economic transition and openness and financial development affect the micro money demand behavior. And then this paper uses the modern econometrics method to estimate the annual money demand function in China from 1978 to 2002, make positive analysis of the money demand structure and the effect of stock market and the fluctuation of RMB real effective exchange rate on money demand. Finally, this paper expounds the policy meanings of main positive conclusion and brings forwards the question needing to study further.Besides introduction and epilogue, this paper can be summed up for two parts: Chapter two and chapter three are theoretic analysis, from chapter four to chapter seven are positive analysis.In theoretic analysis part, chapter 2 makes a survey of the development of money demand theory and positive analysis and draws the following conclusion: First, we should pay attention to studying the demand for money from the individual behavior of holding money; Second, we should consider the uncertainty of resident' s anticipated income and expenditure while studying the demand for money in China; Third, with the fast development of the financial market of our country, we must pay attention to analyzing the money demand of our country from the point of view of asset portfolio, among them the scale of securities trading must have a quite great impact on money demand of our country ; Fourth, as China speeds up the step of incorporating into the international economy, the arrangement of exchange rate regime, exchange rate of RMB, interest rate of international financial market and balance of payments will play a more and more important role on money demand in China; Fifth, the specification of money demand function and the choice of econometrictechnology are equally important, utilizing a well-specificated model and estimation technology (for example , co-integration and ECM) can achieve steady money demand function; Sixth, the positive analysis results of a lot of countries and areas reveal that there exist co-integration relation between the real monetary balance and the explaining variables, and the estimated short-term dynamic function can explain the money demand fluctuation. Then the chapter 3 has studied the effect of economic transition and openness and financial development on money demand, this chapter can divide into three parts mainly: the first part analyzes the effect on transaction demand for money of economic transition, the second part analyzes the effect on precautionary demand for money of economic transition, the third part analyzes the effect on speculative demand for money of economic openness and financial developmentFour chapters of positive analysis can be summarized into two parts: the previous part is chapter four and the chapter five. At first, chapter 4 makes uses of the co-integration and error-correction model to estimate the annual money demand function during 1978-2002. The result reveals that: First, there exists co-integration relationships among the demand for real Ml balance, real GDP, price level and M2/GDP, but the nominal interest rate is not significant in the Ml co-integration function, this reveals that the adjustment of interest has little effect on Ml; and that there exists co-integration relationship among real M2 balance and real GDP, inflation rate, nominal interest rate and M2/GDP. Secondly, the short-term dynamic model of Mland M2 indicate that the adjustment speed of the demand for M2 to long-term equilibrium is more slowly than that of Ml; at the same time, the short-term dynamic function of Ml is more stable than that of M2.Chapter 5 studies the long-term trend, level and fluctuation of money demand str...
Keywords/Search Tags:Ml, M2, Demand for Money, Money Demand Function, Monetary Policy, Economic Transition, Intermediate Target of Monetary Policy, Co-integration, Error correction model
PDF Full Text Request
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