Empiircal Analysis Of Money Demand In The Condition Of Credit Economy

Since the Reform and Opening-up,China’s financial system is getting well,theeconomic system is transforming from planned economy to market economy.But withthe transforming,a lot of problems appear.This problem should solve by thegovernment macroeconomic regulation and control.With the control,a most importantproblem is the formulation and implementation of monetary policy.When we researchthe problem of money,the demand of money is a very important part.It is a greatsignificance to build a money demand function to make sure the monetary policyimplement well.This paper is based on the points which affect the demand of money,than learnabout classical theory, analyze the demand of money with the classicalpoints——income, monetization and rate.Besides,when we research,we find out thatthe demand of money is also affected by credit point.By the analysis of credittheory,we find credit point is important,so,when we build the money demandfunction,we add credit index.Based on the lots of paper,we use the method of cointegration to build thefunction.The specific structure of this paper is as followed:The1st chapter,part of introduction.First we introduce the background andsignificance of the reserch.Money is always a top topic in academia,among this,aimportant part is the demand of money.Than,by reading home and abroad papers,wedetermine using the method of cointegration.The2rd chapter,part of the theory of the demand of money.First we give a cleardefinition of money,and than combine with the China’s actual conditions to divide themoney.Than we introduce the theory of the demand of money,and base on thisaccount,we build the function. The3th chapter,part of basis of micro-foundation of the Chinese currency.Thischapter,we analyze the demand of money from the microscopic point.we analyze thedemand of money from three part, enterprise, individuals and government.The4th chapter,part of the theory of the relationship of credit and demand ofmoney.This chapter is starting by a proposition that the nature of money iscredit.Based on this,we analyze the relationship of redit and demand of money.Byanalyze the three part——enterprise,individuals and government’s credit condition,wefind that the credit condition fall behind the developed country.But the demand ofmoney is affected by credit significantly.The5th chapter,part of empirical.By building the function,we find that M2isaffected by GDP,r,M2/GDP and credit point.The empirical results show that the creditand demand of money have a relationship of positive correlation.Although the degreeof influence is low, But with the continuous improvement of the credit status,thedegree of influence is getting strong.The last part is conclusion.We use the empirical results to give a reasonableexplanation.