| With the acceleration of the RMB Internationalization process,the issuance,circulation and use of RMB should not only meet the domestic transaction needs,but also serve the international trades;besides,the role of RMB will gradually change from the settlement currency into international investment and reserve currency as well.A more flexible RMB institution is a must to better achieve its functional transformation,followed by the deep reform of the entire financial system.Thus,the study on the institutional change path of Chinese paper currency helps to understand the origin and the development of RMB system more deeply for giving us some useful guides.The main argument of this paper is that Chinese paper note system follows a special path of change“the Ancient National Credit Paper Monetary SystemModern Bank Voucher System-today's Credit Currency System”,which is a process to seek financial coordination.It is the result of the game between the government and other social organizations,and there is a path dependent mechanism,the key of which is the positive effect of the government credit on the currency value stability.Therefore,the reform of the RMB system should seek the internal and external coordinations as the goal,making the central bank credit,instead of the government credit,become the deciding factor of the RMB value stability.Based on this,this paper discusses the changes of Chinese paper money system from historical fact analysis and the theoretical derivation two aspects.During the analysis of historical facts,this paper uses Stage Characteristics Summary Method and is based on the nature change of paper money institution by dividing the Chinese paper money system into three stages as follows: Ancient National Credit Paper Money System,Modern Bank Voucher System and Contemporary Inconvertible Credit Standard Monetary System.Ancient National Credit Paper Money System is the first stage(Earlier Song Dynasty – Mid Ming Dynasty),it has experienced four steps as ‘generation(Northern and Southern Song dynasties),development(Jin Dynasty)– national development(Yuan Dynasty)– exsit in name only(Mid Ming Dynasty)',the paper money system in this period shows the characteristics as ‘mono-polized by feudal state,with soft constraint of insufficient reserve,take financial credit as a guarantee and inconvertible in fact;The Modern Bank Voucher System(Mid Ming Dynasty-1848)is the second stage and has experienced three steps as ‘generation(Mid Ming Dynasty-1848)– development(1848-1948)– suspension(1948-1949)',the Paper Money System of this period shows the characteristics as ‘dominated by the political financiers,inextricably linked to the government and the bureaucrat capitalists,the channels and effects of paper money issuance are still closely related to the government's financial credit';Contemporary Inconvertible Credit Standard Monetary System is the third stage and its primary form is RMB system which was established by the new P.R.C and has independent monetary sovereignty,so far,RMB system has experienced three steps as “the continuation of central planning(1978-1992)– the transitional stage(1992-1994)– the commercialize reform stage(1994 to now)”.In summary,Chinese paper money follows the change path with Chinese characteristics as: “the Ancient National Credit Paper Money System restricted by insufficient reserve – the Modern Bank Voucher System led by political financiers – the Contemporary Inconvertible Credit Standard Monetary System with Chinese characteristics',which is coordinated with “feudal commodity economy – the attached capitalist commercial economy – the socialism planned / market economy”.On this basis,this paper makes a theoretical derivation on the reasons of Chinese Paper Money System change path's formation,respectively discusses the financial coordination mechanism and the game equilibrium mechanism behind the change of the Chinese Paper Money System.The financial coordination theory believes that,the change of paper money system is the process of continue to pursue internal and external financial coordination,each innovation of paper money system will improve the transaction efficiency but also bring the financial inharmonious caused by new financial risks,this imbalance will promote the continuous innovation of paper money system.Internal and external coordination jointly promote Ancient National Credit Paper Money System to its peak,after that,it could not well adapt to the needs of the commercial revolution,and finally was repealed.Neverthless,the Modern Bank Voucher System is compatible with the commercial revolution and they have internal coordination.Although it occupies a space in the chaotic monetary system at the time,the failure is inevitable after several attempts at different levels in different time because of the fundamentally inharmonious with the internal unity and external independence requirements for an efficient monetary institution.From a quantitative perspective,the financial coordination depends on the continuous game process between the government and the public,in the formation process of Chinese paper money system,the public and the government not only cooperates but also conflicts in the mean time.The establishment of the Simple Principal-Agent Model and Double Principal-Agent Model respectively reveals the structure of Ancient National Credit Paper Money System and Modern Bank Voucher System;the Dynamic Game Tree Model reveals the realization process of Chinese Paper Money System's function.The RMB system follows the transition path of the paper monetary institution in China,with a self-enhancement mechanism,which evolves both the positive and the negative locking effects.Such a mechanism was proved by the paper monetary Historical Cycle in the ancient China,together with the positive relationship between the fiscal deficit and the price fluctuation in modern China.The RMB system also follows such Path Dependence Mechanism,on the basis of summarizing internal imbalance of current RMB system,this paper further discusses the target model and policy recommendations on RMB system reform.The innovation points of this paper are as follows: firstly,it rises Chinese Paper Money System change from the previous static analysis to the dynamic analysis,and applies the perspective of financial coordination into the study on Chinese Paper Money System Change,uses systematic and dynamic views to re-examine the change process of Chinese paper money,to abstract the change path,which has a unique research perspective;secondly,it adopts a new research method.The historical inductive methods has been frequently used in previous studiesto giving detailed description of the contents of paper money system,while this paper innovates to use Stage Characteristics Summary Method,Financial Coordination and Game Theory method,to give qualitative and quantitative abstraction and discussion to the reasons behind the Paper Money System change with the Causal Loop System Model,to explain the Path Dependence Mechanism behind Chinese Paper Money System transformation,to provide a systematic and dynamic inspiration for the new reform of the RMB system. |
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