Research On China's Money Output Effect

The topic of money output effect is both old and young. It is old because western scholars had many fruitful researches on it from theoretical and positive angle; It is young because the research on it has just started in china and lays emphasis only on the positive analysis on the numerical relations. As the positive fiscal policy gradually fades out, the effect of monetary policy rises. In order to effectively promote the effect of monetary policy on economic growth, we should make clear the causes, the mechanism and the effect of the money output effect. Owing to this, this paper chooses China's present money output effect as its subject.The imperfectly competitive market is the premise of nominal wage and price stickiness. This paper takes the four assumptions of the competitive market as measures and examines China's commodity and labor market respectively. The development of the commodity market in China is not in equilibrium because of administrative monopoly and the division of regional markets and its competitive level is very low because of the inconsistent development between the consume commodity market and the investment goods market; The competitive level of the labor market is also very low because of the labor heterogeneity, illiquidity and the division of labor market and because the wage is not settled by the market. The market non-competitiveness in China determines that there is nominal stickiness inevitably.The nominal stickiness is gradually adjusted by the price level ( wage level) as the change of the market demand and supply. Even in the highly developed economies, the nominal stickiness also exists because of the market imperfection. The start of China's market economy reform is relatively late and the market system is not perfect. So the nominal stickiness in China is different from that of the highly developed economies and has its own features and causes.There is relatively strong nominal wage stickiness in China's labor market. There is many causes it because of the dual wage system and multi-mechanism of the wage determination. The efficiency-related wage system determined that over 70% Chinese worker's wage has strong nominal stickiness. The efficiency-related wage of non-public-owned enterprise makes the other 30% worker's wage also sticky. The contract system of wage goes further to strengthen the stickiness degree and its existing possibility. The nominal wage stickiness is good for explaining the nominal price stickiness.There is relatively strong nominal price stickiness in China's commodity market. First, the nominal wage stickiness determined the existence of the nominal price stickiness; second, there is price stickiness in both the capital goods market and the whole-sale and retail consumption commodity market. Last, the non-competitive market and the government administrative price further strengthen the price stickiness.The nominal price stickiness is the micro reasons for the money output effect. The mechanism of the money output effect includes two links: The first link is that the money supply influences the aggregate demand through Keynes Effect and Pigu Effect. The second link is whether the change of aggregate demand would cause the change of the output. If the mark clears quickly and there is no nominal price stickiness, the change of aggregate demand has no influence on the output. If not, the change of aggregate demand wouldn't affect the output. So the nominal price stickiness makes the money supply influence the output in the second link. By analyzing the increasing rate of money supply and the relation between the investment and consumption increasing rate, we find that the money supply obviously affect the output in china. By examining whether the change of price and wage lag the change of the money supply, we prove there is nominal stickiness and it indeed causes the money output effect. According to this, we derivate the mechanism of the money output effect.As for the efficiency of the money output effect in China, by positive analysis on the r...