Research On The Relationships Between Money Supply And Economy Growth And Price Level Of Our Country

Since China's reform and opening up, people has paid more and more attention to the monetary policy, which has already become an important component of the macroeconomic policy of our country at present. And the role it plays in the national macroeconomic movement is becoming more and more remarkable. Quality of the policy implementation has immediate influence on the balanced development of a country's economy. Since 1998, China has began to take the money supply seriously as the intermediate target of the monetary policy, which symbolizes that our country's manner of regulating the macro economy has began to become from direct to indirect. That if there is remarkable co-relational dependence among money supply, economic growth and price level has started gradually to become the issue of common concern of China's theory and decision-making communities.This essay has carried on a systematic analysis to the movement condition of our country's macro economy from the establishment of the Central Bank system to nowadays on the basis of the researches on the relationships among money supply, economic growth and price level. It finally believes that China's monetary policy is not neutral. The currency authority may achieve the objective of stabilizing prices and then promoting economic growth through adjusting the money supply. But there is obvious limitation in the implementation process of China's monetary policy. The dominant character is the policy failure. It is mainly caused by the improper choice of intermediate target of and the imperfect conduction mechanism of the monetary policy and so on. In the end, it supplies some reference suggestions on how to choose the right intermediate target of the monetary policy and how to perfect the conduction mechanism of the monetary policy and then to strengthen the construction of monetary policy system of China's macro-control..