Study On Inflation And Money Supply, Economic Growth

Since the reform and open policy, our country economic development has achieved the achievement which attracts worldwide attention, but simultaneously also presented the certain extent inflation, especially in 1985, 1988-1989 years and 1993-1995 years, the price rate of increase nearly achieved 10% above high levels, once achieved 24.1% which in 1994 set a record, the so fierce price fluctuation, inevitably stable and living standards' enhancement brought the extremely disadvantageous influence to the economic society. How to maintain the economical the steady swift growth, and as for does not have the serious inflation is various countries' government urgent needs to solve an important topic, especially in national economy swift growth's China, prevents the inflation the duty to be especially arduous. The currency person always thought that the money supply are excessively many are causes the inflation the basic reason, therefore firmly believed that the contraction the monetary policy solves the inflation only magic weapon, but the real diagnosis result showed that the money supply are excessively many only induces one of inflation reasons, the solution inflation cannot the pure dependence monetary policy, in transition period China, cause the inflation reason to be intriguing particularly, depends upon the monetary policy which reduces not only not to be able merely the effective addressing inflation question, even has the possibility to further intensify the inflation.Since therefore, for the exploration reform and open policy our country all previous inflation's deep level reason, this article theoretically has first analyzed 1978 - 2008 the money supply, the economic growth and the inflation relations, discovered that between the money supply, the economic growth and the inflation have the close relation truly. To further be clear about three between the reciprocities, this article has used unit empirical analysis methods and so on root examination, Grainger causal relation examination, VAR analysis, pulse response function, drew the following conclusion:The reform and open policy for 30 years, take the high investment, the high consumption, the high money supply as the characteristic economical high growth, has provided the objective environment for inflation's appearance, said from some kind of degree, the Chinese this kind of high investment's extensive -like economic growth, is take the high inflation as the price. (2)Creates China inflation the reason is various, the money supply and the economic growth play the obvious stimulation to the price rise, between the money supply and the inflation, the economic growth and the inflation have the long-term balanced relations, the two to inflation's influence are long-term. In controls other variables in the situation, the economic growth compares the money supply to inflation's influence to be remarkable.(3)The money supply, the economic growth will cause the inflation, but the moderate inflation will also stimulate the economic growth, the two will assume the bidirectional causal relation. The inflation cannot cause the money supply increase, the two assume the one-way causation. The money supply and the economic growth have certain hysteresis quality to inflation's influence, but inflation's on age has the remarkable forward function to under age, explained that its oneself has an issue of inertia, once has the tendency which has deepens unceasingly.According to the above real diagnosis conclusion, this article from the prevention inflation, suppressed the overheated economy and the promotion economy coordinated development three aspects proposed the following policy suggested:(1) Prevents and controls the monetary policy which the inflation cannot the one-sided dependence reduce, must adopt the comprehensive program of public order the countermeasure, because the counter-bloating policy cannot play the role immediately in a short time, needs certain time lag to be able to have an effect, during this process must measure between each policy the interaction, especially avoids between the policy the counter-balance effect.(2) Guards against and the government inflation in China must take the economic growth way the transformation and the economic structure strategic adjustment, changes positively relies on the investment in the fixed assets fuel economic growth excessively the aspect, the display domestic demand to the economic growth lasting drawing function, thus attenuates the economic growth and the money supply to the price the influence, promotes the national economy to step onto the positive cycle the path.(3) In the economic growth process did not mean that certainly must eliminate the inflation completely, but is must the inflation control in the impetus economy sustained growth reasonable scope, enables the situation which the two concurrently result in possibly to become. The government price control department must strengthen the market price the monitor, the inspection and the regulation, especially to relates the national economy and the people's livelihood the important profession and the Key sectors, must implement the price control the measure, thus maintains the price overall level basic stable.