The Empirical Study On The Relationship Among Money Supply?Investment And Gross Domestic Product

Since China has been reforming and opening up,the economy grows in a speed of about 10% per year on average.But since 2011,the national economy has been slowing for six consecutive years.Due to the downturn in the growth rate of manufacturing profits,higher non-performing loans of banks,financial market uncertainty,economic downward pressure still exists in 2017.The inflationary pressure caused by the issuance of currency and the diminishing marginal output of capital make policy makers to review the way of economic development in the past.They also should clarify the relationship among money supply,investment and GDP,in order to actively promote economic reform,and inject new impetus to economic growth.This article will select the data of China's money supply,investment,and gross domestic product(GDP)from 1991 to 2015 as sample.After a series of econometric test like stationary test,cointegration test,granger causality test and other econometric test,VAR(1)model is constructed,which will help to figure out the relationship among the three.But the model is inadequate,after the improvement of measuring method,using quantile regression model to study the relationship between them.The comprehensive analysis results have been gotten,finally.The analysis finds that there is a long-term equilibrium relationship among the three.further more,money supply and investment have a positive impact on the gross domestic product(GDP),but this effect is not sustainable.no matter at what level of economic growth,the impact of the previous period of money supply on economic growth is large,moreover,with the development of economic growth,the impact is more and more larger;no matter at what level of economic growth,the impact of the current period of investment on economic growth is small.with the development of economic growth,the impact of the previous period of investment on economic growth is smaller and smaller.But the former this impact is not significant when the economy in a high level.