Theoretical And Empirical Analysis Of The Micro-foundation Of China's Money Supply

This article firstly generalizes the main idea of some schools of money supply thought and its effect on the development with money supply theory and its theoretic model. It analyzes the asset and liability statement of the central bank, designs the basic model on money supply and its main decisive factor.Using the basis theoretic model, it demonstrates the alteration of the quantity of money supply, monetary base and money multiplier of China since the forth quarters in 1997, summarizes their altering rule, and finally proves the adaptation between the increasing of the quantity of money supply and the national economy.The thesis chiefly analyses the effect that the behavior of the micro economic entities takes on the money supply, monetary base and money multiplier. On this basis, the thesis designs an integrated theoretic model of the micro base of money supply and demonstrates it.The thesis finally considers the effect that the alteration of the balance of payments takes on money supply. It analyses the alteration of net abroad asset, its reason, its effect on money supply and the counteracting of the central bank. At last, it generalizes the confining model of the reasonable size of foreign exchange reserve of China.