The Study On The Asymmetry Of The Global Money Supply

This paper has paid much attention to the in-born asymmetry structure of the global money supply through the analysis of the innate properties of the global money. It is verified that foreign assets are the Granger clause for the money supply of the developing countries, but not the Granger clause for the money supply of the developed countries. This paper analyzed the spillover effect of global money supply and found that the US dollar supply is the most important factor of global money supply which has great long-term positive impact on the global inflation. The asymmetrical global money supply system will encourage the fluctuation of global liquidity accompanied with the credit crunch. This is the root of the subprime crisis in 2007 and global financial crisis in 2008.