The Impact Of Fictitious Economy Development On Monetary Policy: A Study In China

This dissertation analyses the impact of fictitious economy development on monetary policy by applying normative and empirical analysis at the base of the macroeconomic theory, monetary theory and fictitious economy theory ,sets up a comparatively analysis frame in order to play a reference role.Firstly, at the base of previous researches about the defines of the fictitious economy, the thesis explains the necessary to study fictitious economy and monetary policy in China and Constructs China's money demand function model for fictitious economy development. Secondly, analyses the impact of fictitious economy development on money supply by ADF test and Johansen cointegration test. Thirdly, we analyze the monetary policy transmission mechanism effects of fictitious economy development from the wealth effect, investment effect and credit transmission channel effect by OLS, ADF test and Johansen cointegration test methods. Next, analyzes the effect of monetary policy intermediate goals by Granger causality test methods, and suggests the future intermediate goals of monetary policy. At last, analyzes empirically the impact of fictitious economy development on the ultimate goal of monetary policy.From the China's money demand function model, it can be concluded that fictitiouseconomy development has distinct impact on M₁ and M₂ ,and the impact of fictitious economy development on money supply are positively correlated with M₀ M₁ M₂ ,but the elasticity coefficients are different. At the background of fictitiouseconomy's expanding, China would sustain take the money supply as the intermediary target in the next period of time. At the same time, central bank can take exchange rate and interest rate as reference for intermediary target. From the transmission mechanism of monetary policy, fictitious economy development has positively wealth effect which is not weakness, and has positively investment effect. From the credit channel, the value added to gross industrial output has a stable plus relationship with fictitious economy development. So the development of fictitious economy has little effect on credit channel of monetary policy, but it can be another channel of monetary policy. At last, China fictitious economy development has a stable negative relationship with price level, and the increasing of aggregate of fictitious economy will promote economy growth.