The Relationship Research Of Money Supply And Seigniorage In China

Seigniorage means that the coins minted by offering the mintage material and certain payment to the mint in history, the governments will impose the tax, which is Seigniorage. At the credit money era, the government issues the currency at a very low cost. Therefore the money issue monopolized authority could issue currency and impose seigniorages to compensate the deficits. But too many money will bring in inflation at a very high costs. The maximizing seigniorage is the choice of the money issue monopolized authority between the issue benefits and social costs.The research of seigniorage is not only a standard but a quantitative problem. The government follows which rule, there is no united answer. Because of the covered seigniorage, there is no government decision in money supply model. Without considering of government capitals, Government Issue the money can gain the seigniorage. We can gain the seigniorage at the basis of the best money supply. This article analyses seigniorage from monetory economics. Without considering the other monetary goals, just study from the government decision. Through Chinese data and experience, we discuss the western model whether fit for our country. Judge whether the seigniorage fit for China.First, analyzes our country's seigniorage'defination. Then connect seigniorage with money supply. Study the existence of seigniorage and the influence of seigniorage for Chinese economy. And at the basis of Cagan Models, seriously analyzes the relationship between seigniorage and money suppy. Discuss the connection of seigniorage and money supply. Illutrates that the two exist the relationship with each other. So it is naturally to propose the maximizing seigniorage. And the article follows the principle of integrating the quantitative analysis and the qualitative analysis. Study deeply about the problem of money supply and seigniorage. And propose to how to use the seigniorage and the feasible policy suggestions.