The Impact Of Money Supply On Agricultural Product Price Fluctuations

The fluctuation of agricultural product prices is related to the people's livelihood.The abnormal fluctuation of prices may cause social turmoil,economic depression,and workers' unemployment.Therefore,it is of great significance understanding and grasping the mechanism of agricultural products.The government cooperated with the central bank and administrative departments,regulates the prices of agricultural products by means of a series of fiscal and monetary policies.After decades of exploration,the government has also formed a relatively complete set of agricultural product market management mechanisms,which has a positive effect on stabilizing the agricultural market.However,in the case of an emergency,there are sometimes drawbacks.For example,the global financial tsunami in 2008 and the frequent domestic disasters in 2011,the domestic agricultural product prices fluctuated abnormally,and the existing monetary policy could not perfectly adjust its price fluctuations and stabilize the market.Therefore,it is very important to study the impact of money supply on agricultural product price fluctuations.It is found that the influence of domestic and foreign scholars on the price fluctuation is mainly concentrated on the influence of government fiscal policy.agricultural product supply and demand relationship,agricultural product supply channels,international market and agricultural product financial market,money supply and inflation.There is little study involved,and did not conduct a detailed study of the impact mechanism of money supply and inflation.The papers studied the price fluctuation of agricultural products.Combined with the changes in monetary policy that have been stirred up by the reform and opening up for past 30 years,this paper argues that China's monetary policy has been adjusted around tightening and loose monetary policy.Therefore,with the help of the LSTAR model,the state of monetary policy over the years has been scientifically divided,and the problem of changes in agricultural product prices has been analyzed on different district systems.In the process of comparison with the industrial price change index,it was found that the agricultural products was more sensitive based on the same monetary policy.The time series method has been used to the research.and VEC model has been used to analyze the mechanism of overshoot of agricultural product price.The measurement methods are involve in: Granger causality test,LM test,stability test,estimation of Cointegration equations,Johansen Cointegration test,etc.The innovation of this paper is to analyze the state distribution of monetary policy by means of LSTAR model,and eliminate the state jump with the Markov transformation model.LSTAR model is more reasonable in actual work.In addition,based on the price transmission mechanism and the industrial chain,it is reasonable to analysis the mechanism of overshooting of agricultural product price.The data that from the first quarter of 2004 to the third quarter of 2017 has been used,to analyze the impact of monetary policy on agricultural product price fluctuations with mathematical models.Firstly,this paper explored the asymmetric effect of money supply on agricultural product price fluctuations.Analyzing the characteristics of agricultural product price fluctuation under two regimes with model and test;Comparing the impact of transfer variables to agricultural product prices by generalized pulse function.The results show that the threshold is less than 0.1754,that is,the economic contraction state;the second system is the state where the threshold is greater than 0.1754,and the economic performance is expansion.In the economic contraction state,the fluctuation of money supply to agricultural product price is more sensitive than that in economic expansion(0.93>-0.43;|-0.59|>|-0.40|),that is,the supply of money has an asymmetric effect on agricultural product price fluctuation under different regional systems.Furthermore,based on price expectations and industry chain theory,the paper analyzes the theoretical mechanism of overshoot of agricultural product price and prove the overshooting Hypothesis with the actual data.The results show that:(1)monetary policy can not directly affect product prices,but affect with market intermediaries;(2)under the impact of monetary policy,agricultural products prices are over-adjusted compared with industrial prices;(3)High inflation makes agricultural product prices more volatile.