A Correlation Study Between Endogenous Money Supply And Economic Cycle Fluctuations

As an important macroeconomic variables for money supply,on the one hand, it is the intermediate target of money policy,determine the effect of monetary policy implementation; on the other hand,it is also an economic variables which affected by a number of factors in the economy. Our money supply has undergone series of changes with our market-oriented economy deepening since the reform and opening-up.Through the analysis of the economic situation,we have found the endogenous money supply is growing in recent years.so discuss the money supply endogenous is important to understand the operating mechanism of the money supply and formulate effective monetary policy.The article use theoretical analysis and demonstration research to analyze the relationship between the endogenous money supply and the fluctuation of economic cycle.In the theoretical analysis,the article first reviewed the relevant literature about money supply endogenous and expound the significance of endogenous money supply theory. secondly, through divide the economy cycle fluctuation and combine the Western theory of endogenous money supply,we analysis the relationship between the changes of monetary policy and the economic cycle,then we reach a conclusion that our monetary supply has endogenous characteristics.In demonstration analysis,the article use the co-integration analysis and Granger causality test to analyze the relationship of money supply and GDP, CPI,investment, government spending and exports by use of essentials of econometrics software Eviews 6.0 edition,verify the conclusions of the close relationship between cyclical nature of domestic money supply and the economy.Finally,based on the research conclusion analysis and integrate the characteristics of Chain?s economic development,the article advanced many related proposals to improve the effectiveness of monetary policy in how to revision the economic structure and ensure economy develop healthy.