The Research On Monetary Velocity Of Our Country

The monetary velocity theory is an important component of monetary theory. There is important directive significance to the monetary policy practice too. The monetary velocity is reflecting economic running quality and one of the effective indexes of the quality of monetary circulation. According to the rate of increase form of the equation of the income, money supply rate of increase which as monetary policy intermediate objective mainly is decided by the economic growth rate, rate of price rises and rate of change of speed of the monetary velocity .Therefore, through the study on monetary velocity , we can analyze the actual effect of the monetary policy more deeply , and play a certain reference arriving role to the formulation and implementation of the monetary policy.At first, the article analyzed the change trend of the monetary velocity of our country since reform and opening-up. The monetary velocity of our country has demonstrated the regular time sequence characteristic that decreases progressively for a long time since the reform and opening-up, have consistency with the general downward trend of the monetary velocity in the whole world. The tempo change of monetary velocity of our country is in the downward trend of the long-term, the short-term fluctuation exists and obvious obeying cycle appears in the short- term change . We can discover the M1 and M2 velocity of our country paces back and forth for a long time in the low level with the international comparisonThen, we analyzed the reason which affected the monetary velocity of our country and carry on the positive research and carry on the causality test. We can discovered the factors which affected the monetary velocity of our country long-term drop include the economical monetization degree, the change of , interest rate, high savings ratio. The financial innovation added the rise factor in the tendency which the monetary velocity dropped in China. The monetary velocity of our country will drop for period of time as a result of monetization deepening. The monetary velocity of our country overall tendency possibly rises with the economical development and the financial system consummation and the interest rate marketability.This article has further analyzed the impact on monetary policy validity of the monetary velocity and discovered the monetary velocity often reduced the government...