The Influence Of Third Party Payment On Money Supply In China

With the rapid development of network technology and the deepening of financial innovation,the integration between the Internet and finance is increasing day by day,thus giving rise to Internet finance.The popularity of Internet finance has brought great impact to the development of traditional finance.The traditional financial model may generate credit risks such as "malicious fraud on loans" in the transaction.The role of third-party payment as an intermediary largely avoids a series of risks.Therefore,third-party payment has been recognized by the masses in a short period of time,gradually changing people's payment habits.The rise of third-party payment makes electronic money gradually replace cash in circulation,and has a certain impact on the deposit reserve ratio and cash leakage rate,which further affects the base money,money multiplier,money circulation speed and money supply,and finally affects the stable implementation of China's monetary policy.From the point of view of the existing literature,the research of Internet financial mostly too electronic currency,has been gradually increased in recent years,the study of the third party payment,however,most of the research is a third-party payment of money multiplier and money velocity in one aspect,the lack of integrity of the study,and most of the articles in the empirical research is the annual data,data is less.This paper theoretically analyzes the influence of third-party payment on China's base currency,currency multiplier and currency circulation velocity,and summarizes the specific influence of third-party payment on China's money supply.In the empirical aspect,the study of related variables adopts the data of the last quarter to make the results more accurate.Finally,combining theory with evidence,this paper analyzes the influence of third-party payment on monetary policy,and puts forward a series of suggestions.Text elaborated the related definition of third-party payment first,and then theoretically analyzes how the third-party payment by cash in circulation to influence how our country's monetary base,through cash leakage rate and other factors to influence the monetary multiplier and how the monetary level to influence our country's monetary circulation speed and money supply.And the following conclusions are drawn: the development of third-party payment has reduced the growth rate of base money,made it more difficult to predict the narrow money multiplier,slowed down the velocity of money circulation,and finally reduced the money supply.Secondly,empirical methods such as stationarity test,ADF test,co-integration test and error correction model are used to test the influence of third-party payment on cash,money multiplier,money circulation velocity and money supply in circulation in China.Finally,summaries and relevant policy suggestions are made for the study of this paper.It is believed that the central bank should objectively consider the impact of third-party payment on China's money supply and make timely adjustments to better face the challenges.In addition,this paper also puts forward the further research direction at the end of the paper.