Study On The Development Of Fictitious Economy Affecting Money Demand In China

As the stock and the real estates market booming, many people pay attention to the study on the fictitious economy. Their researches mainly continue Marx's study about fictitious capital, but opinions on the basic difference between the fictitious economy and the physical economy are different. In this paper, I give a new analysis of the difference innovatively from the view of transaction goals. In the fictitious economy, people take the unproductive investment as a goal, and a will-supported pricing way is suitable. According to this definition, I analyze the fictitious characters of stock, fund, bond, future and real estate transactions; induce the fictitious economy's positive and negative effects on the physical economy; and expand Friedman's discussion about the effects from the stock market to monetary demand to all kinds of fictitious transactions. In empirical research, different fictitious economy transactions are considered simultaneously in the model of monetary demand as an attempt. And I use a real estate premium variable to denote roughly the fictitious economy in realty transactions. Compare the error correction models and the difference variable models between M1 to M2, we can conclude that the fluctuations of different fictitious economy transactions have remarkable effects of different directions on monetary demand. By analyzing the effects, we can just see the investment goals in different transactions in the real life.