The Relationship Among Internet Finance, Economical Development And The Efficiency Of Monetary Policy Transmission

Internet finance is a product of social financial development to a certain stage, which is a new financial format. With the rapid expansion of Internet finance in recent years in China, the penetration to the substantial economy is also growing. Especially in the progress of Internet finance development in recent years, it is rising in accounting for the proportion of the money supply. Therefore, it has important practical significance to study associated problem.Payment and settlement is a major cornerstone in Internet finance, which plays an important role. Judging from the two core elements of Internet platform and financial functions,Internet finance can be divided into third-party online payment, P2P network loans and mobile online payment. Because these three forms are in the form of electronic money, according to the Keynesian theory about money demand, they are also of money demand in a modern form.Third-party payment can be seen as transaction demand, P2P network loans can be seen as a speculative demand. This paper mainly focus on internet finance in the form of money demand which has an impact on money supply and thus have a positive effect on the economy, meanwhile, the Internet as a platform has a relatively low cost to search information and make transactions,so it has a higher efficiency to the traditional monetary policy.For the study of the Internet finance to economic development and monetary policy conduction efficiency mechanism, theoretical research scholars have done a lot. This study mainly expands into two parts. The first part is the theoretical analysis, in this part mainly elaborating the theory of money in supply and demand and neutral currency; the second part is based on Keynesian theory of money demand, describing that the essence of the Internet finance appears in the form of money demand,in fact which is non-neutral; Finally, the paper need to conduct empirical analysis by associating the relative theory which has been described before with the actual situation in internet finance. Because the progress of internet finance development in China is still very short,the relative research data is finite.Based on these reasons, this article can only select 2009 and 2015 quarterly data as a reference, by unit root test, Johansen cointegration test to establish VADL model, namely variable coefficient autoregressive distributed lag model to empirically study changes of GDP in each period and the impact on economic development and the efficiency of the monetary policy transmission and monetary delays. The results show that the Internet financial impact on the economy is very significant and have a very high efficiency of the transmission of monetary policy,meanwhile the leakage is small as opposed to the traditional monetary policy transmission, which also shows the relevant financial authorities need to develop the Internet finance, eliminating the interest rate controls, further promoting financial deepening.