The Nanjing National Government's Legal Tender Policy And Inflation

The government's legal tender policy is a major event in the history of currency.Since the late Qing Dynasty,the previous government currency disorder but failed to achieve monetary reform.Because of the currency war at the end of 20 s at the beginning of the thirty imperialist countries for the transfer of the world economic crisis and disaster,China's silver currency volatility in the unstable,farming industry suffered a serious blow to the national economy was on the brink of bankruptcy edge,making monetary reform more urgent.The government to seize this opportunity,then in November 1935 announced the implementation of non cash currency policy.After the implementation of this policy,the government to gradually control the financial,fiscal balance,strengthening the ruling power.In the theory of the quantity of money,there is a causal relationship between the change of the quantity of money and the change of the price and the value of money,if other factors remain unchanged,the quantity of money is directly proportional to the price level,while the quantity of money is inversely proportional to the value of money.Long term and sustained inflation is due to a large number of super economic issue,and the reason why the currency can be a large number of super economic issue is related to the issue of currency system.This paper through 1935 issued legal tender policy and inflation,and expounds the relation between the currency and inflation.This paper based on the existing theory and literature,analyze the mechanism of the legal tender currency amount and price index,research status of legal tender issued during the money supply and inflation.An empirical analysis on the basis of the data processing and the stability of the inspection by the selected variables and test,from Grainger through the VAR model to analyze the causal relationship between the variables of the impulse response function of the angle.The empirical results are analyzed,summarized and summarized,and the corresponding management policies and suggestions are put forward.