| In late April2013,the balance of M2is more than RMB one hundred trillion yuan, up to103.26trillion yuan in China,with year-on-year growth of16.1%,which did not cause the changes in the actual output rate of change and the rate of change of price level. Faced with huge M2under the stable price level, and real estate prices rising,according to the theory of traditional monetary demand, we introduce the real estate prices, the RMB exchange rate and other factors in the currency demand equation, which not only to a certain extent explain the unstable money demand,but also provide guidance for the establishment of monetary policy.This paper studies the nature and features of our country money demand function since January2002to December2012,the results show that the national real income,inflation expectations,real estate price fluctuations and the RMB exchange rate changes are important variables influencing long-term demand for money balances.Real national income has an important position" in the money demand function for a long time,this mainly results from the trading in commodities trading currency demand and the exist of preventive money demand due to the social unsecure system,at the same time,because the financial innovation and financial products in China is not sound,this deepened to the possession of depositlnflation expectations have strengthened the economic subject in real assets of consumption and investment, resulting in the substitution effect on demand for real money balances. In fact, the real estate market yields, expectations of inflation and the rate of change of RMB exchange rate is a measure of the opportunity cost of holding money, but the yield of the real estate market dominate. Not only because commercial housing market is a capital intensive industry, the size of its trade is huge, also, the housing reform and the housing commercialization makes house prices rise sharply, making many property buyers have to reserve the rigid demand huge sums of money to complete property to pay, and high yield of the real estate market has increased the speculative demand for money. And appreciation of the yuan appreciation expectations through currency substitution effect and the international capital flow effect increase the long-term balance of money demand. At the same time, international capital flow is rapidly changing, international capital flows and the yuan’s rise depreciation expectation is on the same time, and both will reinforce each other.The results also show that short-term effects of M2influenced by the rate of change of RMB nominal effective exchange rate,the yuan’s nominal effective exchange rate of the expected demand for real money balances are short term.compared with the influence of exchange rate expected rate is RMB nominal effective exchange rate, the influence degree of the demand for real money balances is bigger and longer.Based on expectations of RMB exchange rate changes,the short-term capital flows yields is one of the important factors in short-term rise in China’s real estate market,it is also one of the causes of inflation in China.Therefore, the implementation of China’s monetary policy need to consider the real estate price fluctuations and the RMB exchange rate. On the basis of the stability of RMB exchange rate expectations, the people’s bank of China shall provide appropriate money supply to the society, and reasonably control the real estate price bubble, to ensure steady economic growth and the overall price level stability. At the same time, the people’s bank of China should pay attention to the expected appreciation of the yuan to slow the yuan’s exchange rate appreciation making expectations of international hot money mass flow on the bad influence of China’s real estate market and the real economy.Firstly, promote the reform of income distribution, increase the financial innovation, gradually reduce the real national income’s influence on the demand for real money balances, reduce the proportion of M2/GDP, make efforts to improve the efficiency of the currency to promote economic growth;Secondly,gradually expand the exchange rate volatility,reform the central parity rate formation mechanism, strengthen the flexibility of RMB exchange rate and price discovery function,guide the market step by step for the reasonable expectations of the exchange rate and refer to the quilibrium stability of rate level to meet the condition of open economy monetary demand; Thirdly, gradually increase the proportion of real estate prices in the consumer price index,add the index of property prices into the monetary policy observation, according to the real estate price fluctuations impact on money demand, flexibly use the monetary policy tools to adjust the overall liquidity of the banking system and to adjust the money supply to meet the demand for money; Fourthly,coordinate monetary policy and tax policy, land policy and the affordable housing policy,properly control credit of the real estate market gradually out of the real estate market excess funds,as far as possible to reduce the bubble,eventually play the leading role in the economy;Finally,keep a close watch on the international capital flow trend, prevent the heat money on the impact of the financial market and commodity market in China. We need to gradually improve the timely and effective cross-border capital flow monitoring and early warning system and emergency measures, pay close attention to the offshore RMB exchange rate, interest rate market orientation and prevent RMB rate spreads arbitrage fund large-scale fluctuations causing abnormal fluctuations. |
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