Theoretical And Empirical Analysis On Endogenous Money Supply

First of all, the article introduces endogenous money supply theories of former and post keynesianism, then it theoretically analyzes the decisive and adjustive mechanism of endogenous money supply, and the role of central bank. And then it makes an empirical study about the national money supply in China, trying to prove the endogenous nature of money supply in China from various aspects such as monetary base, money multiplier, velocity of money circulation, the relationship between income and money supply, etc. In the end, it suggests that inflated demand, deflated demand and velocity of money circulation should be put into due consideration if total money supply is taken as "intermediate target". What is more, the role of central bank is to eliminate the interference of non-market factor to money supply, and the way to control of money should be "need-oriented".