Relationship Between Money Supply And Stock Market

With the rapid developing of world economy, Chinese economy is developing fast from the real economy to the virtual economy.And finance also plays an indispensable role. People begin to pay more and more attention on the financial markets. The healthy progress of financial markets cannot leave the government that implemented a series of policies, including policy. The stock market as an important part of capital marketplace, that is closely combined with other financial market progress. The people’s bank of China will adjust interest rates and money supply by using monetary policy. It is very important between monetary aggregate and stock market in the paper. And the relationship including theory and practice of monetary policies supply the benefice and advice.The paper mainly be split into three parts. The first part of main content not only analyzes money supply and but also analyzes stock price index theory. And the money supply influenced factors of stock index.The second part mainly use econometric model to analysis the stock market and macro monetary supply relationship. In this paper, on the all perspective, using the ADF test, Granger test, Johansen cointegration test and other many econometric method. The stock price volatility and the inner relationship between the money supply is analyzed. The third part mainly used the important results of theoretical and empirical research to explore the stock price elements in our country. Finally it summarizes the conclusion of the research and capital analysis, to obtain the country policy towards money supply and the effects on the market for stocks.