Research On The Impact Of Third-party Payment On The Velocity Of Currency Circulation And Monetary Multiplier

Along with Internet technology and information technology development in China,Internet finance represented by third-party payment is booming.Third-party payment is increasingly becoming the infrastructure of the Internet finance industry.The rapid development of the third-party payment market plays an important role in facilitating consumer payment and improving the infrastructure of the financial market in China.Studying the problems related to monetary policy from the perspective of payment system will become a new field of monetary economics.At present,the payment principles,user's habits,penetration rate and business scale of China's third-party payment market have already influenced the velocity of currency circulation and monetary multiplier,which will increase the difficulty of monetary policy regulation.Therefore,it has great theoretical and practical significance to study the influence of third-party payment on the velocity of currency circulation and monetary multiplier.Fristly,this paper elaborates the current situation of the development of third-party payment in our country,reviews the theory of the velocity of currency circulation and monetary multiplier,and then theoretically analyzes the velocity of currency circulation and monetary multiplier added to third-party payment.Through theoretical analysis,it can be determined that with the development of third-party payment,China's cash velocity(V0)has increased.Narrow velocity(V1)and broad velocity(V2)show a downward trend in the long run.Third-party payment makes narrow monetary multiplier(K1)and broad monetary multiplier(K2)increase.Then through the third-party payment,the paper makes an empirical analysis on the velocity and monetary multiplier at all levels.This paper mainly uses the measurement model as a research tool to explore the influence of third-party payment on the velocity of currency circulation and monetary multiplier.When studying the influence of the third-party payment on the velocity at all levels,we choose the third-party payment scale,GDP,and the 30-day inter-bank lending weighted interest rate as explanatory variables for empirical analysis.Through the stationarity test and cointegration test,on the basis of the VEC model,the author continues to carry out impulse response analysis and variance decomposition analysis to further explore the relationship between variables,and draws relevant conclusions through empirical research: in the long run,thedevelopment of third-party payment will stimulate V0,inhibit V1 and V2.When studying the influence of the third party payment on the monetary multiplier,the VEC model is established through the stationarity test and cointegration test,and the relationship between variables is analyzed from the long-term and short-term levels.Finally,the degree of mutual influence between variables is further studied through impulse response function and variance decomposition analysis,and the conclusion is drawn that the influence of the third party payment on the monetary multiplier is proportional in the long term.Based on theoretical research and empirical research,it is found that third-party payment has a substantial impact on the velocity of currency circulation and monetary multiplier in China,thus affecting the effective implementation of monetary policy.Therefore,the theoretical guidance basis and selected policy indicators that monetary authorities refer to in the formulation of monetary policy need to make some changes in combination with the current development of third-party payment,strictly detect the impact of third-party payment on the velocity of currency circulation and monetary multiplier,and further improve the management of the entry and exit mechanisms of the third-party payment market.At the same time,the author also puts forward the direction of further research.