The Study Of Impact Of Idle Money To The Real Economy

The idling money demonstrates the issued money does not enter the real economy in time and or is just circulating in the financial market.This would lead to monetary excess liquidity in the market as well as an undesired phenomenon that the shortage of capital restricts the real economy to develop.This paper expands under the background of "Money Shortage" which resulted in a rise of interbank offered rate happened on June 20th,2013.Therefore,whether our country is still existing the idling money or not in nowadays,and how does the quantity of real money that made by idling money supports the development of real economy as where as the importance to the real economy by idling money are going to discuss in the following.Based on the above matters as the breakthrough point,this paper would start from the exploration of China's currency levels,qualitative analyzes that our country is truly exists a huge amount of money into the virtual economy with high return,and idling circulated in the financial system.Also,the article defines that the idling money.In addition,through the impulse response function and variance decomposition of VAR model,meanwhile combines the practical economy data,and then measures the sensitive response of money supply in both real economy and virtual economy,roughly the size of money supply into the real economy,concludes the virtual economy is actual occupying a considerable money which should have into the real economy,and the extent of the virtual economy's support for the real economy is a little bit weak.In the end,according to the current problem of real economy development,this article would come up with relevant suggestions that based on monetary policy transmission and the operation of the financial system.It does not encourage to solely rely on expand the quantity of money supply in order to stimulate the economic growth.What's more critical is to satisfy enterprises in our country to develop with corresponding money demand and promote consumption and investment eventually.For example,improving and perfecting our country's social security system,reducing public precautionary motivation to money,effectively enhancing market economy system and consolidating taxation mechanism,manipulating and correcting the negative effect of idling money to real economy,narrowing the gap of the return rate between entity investment and financial investment are the key methods to solve the problem.All in all,the goal is to make full preparation regarding to support the real economy to develop well in the future.