The Analysis Of The Money Supply's Influence On Growth Enterprise Market's Stock Prices

Money supply is an important measure of monetary policy for a nation,and it greatly affects the effectiveness of monetary policy.Whether the growth enterprise market as the economic barometer of the emerging small and medium-sized enterprises can be effectively controlled by monetary policy,has always been a question of nobody.The in-depth analysis of the relationship between the money supply and the stock price of the growth enterprise market is of great significance to the institutions and individual investors who are going to invest in the growth enterprise market as well as to guarantee the sound development of the stock market.The theoretical research in this article for the affection of our country's money supply on the growth enterprise market states how the money supply affects the price of growth enterprise market stocks with the empirical research,compared with A-shares main board market.It is found that the market price of China's GEM is more sensitive to changes in China's money supply,while the price index of A-shares main board market has a weaker response to changes in China's money supply.This paper studies the ability of the money supply's long-term impact,the impact way,and the influencing period on the growth enterprise market stocks' prices and Shanghai Stock Exchange A-stock Market's stock prices.According to our research need,research purpose and the complexity of obtaining the related data,we select two variables respectively:M1's monthly data and the monthly data of the Growth Enterprise Index.Through the econometric model,money supply' s influence on growth enterprise market stock prices is presented.This paper establishes the VAR model,and finds a co-integration relationship through the co-integration test.On that basis,it keeps on running Granger causality test,which comprehensively and concretely studies the effects of the narrow money supply on growth enterprise market's stock prices with impulse response analysis.This research shows that the narrow money supply M1 has an obvious positive effect on the growth enterprise market's stock index,which means the greater the money supply is,the higher growth enterprise market's stock prices are,but the money supply's influence on the growth enterprise market's stock prices will decrease to the lower level than the original after two periods.This conclusion provides certain reference suggestions for the investors of the GEM stock market and the makers of monetary policy,and has certain reference value for further understanding of the operating rules of the stock price of the GEM.Finally,this paper makes a simple conclusion and analysis of the above empirical results,and puts forward two policy suggestions:including monetary policy should focus on not only the CSI 300,but also the growth enterprise market;the central bank should improve the transparency of monetary policy.It is hoped that the research of this paper can make a small contribution to the study of the relationship between the money supply and the growth enterprise market.