China's Money Supply Controls

With the development of monetary theory, money and monetary policy have played a vital role in stabling economy and pushing the wheel of economy ahead. The regulating of money supply is the key of basic economic policy. The exact cognition of money supply and regulating has significance during the process of Chinese financial reform.Based on the basic theory of money and money supply ,firstly, this thesis make a general study on conditionality of Chinese money supply controlling; secondly, we empirically analyze the relation between money supply and economic growth , constructing an error correction model by applying co-integration theory and Granger causal test. Finally, set up the optimal control model about money supply using the basic theory and method of economy cybernetics. So, the research of the thesis has certain significance for regulating macroeconomics system.This thesis is scheduled as follows:Chapter One, Preface. Brief introduction of the idea of the thesis and analysis method that include the source of the title, theoretical significance and analysis method.Chapter Two, Money and money supply. The main contents include: basic concepts of monetary and financial theory with regards to summary of Chinese contemporary bank money supply mechanism.Chapter Three, Analysis on regulating money supply and Intermediate target of monetary policy .the main contents discuss the exogenity and endogenity about money supply and the select of intermediate target of Chinese monetary policy.Chapter Four, Conditionality of regulating money supply. We make a general study on conditionality of Chinese money supply controlling.Chapter Five, Empirical analysis of the relation between money supply and economy growth. This is the key part of the thesis, find the causal relationship among the money supply and macroeconomic variables and calculating the impulse of the alteration in money supply.Chapter Six, Chinese money supply optimal control model. This chapter is one of the thesis's cores and keynotes. We set up the optimal control model and calculating the optimal money supply using of the economy cybernetics method.