Study on Influence of Balance of Payment on （研究影响收支不平衡）.pdfVIP

Study on Influence of Balance of Payment on Money Supply and Its 1 Transmission Mechanism under Exchange Rate Stability Goal TANG Anbao FU Li School of Management, China University of Mining and Technology, P.R.China, 221116 School of International Economics and Trade, Beijing International Studies University, P.R.China, 100024 tabcjp@163.com Abstract This paper applies regression analysis, Granger test and generalized differential regression analysis, etc to make choice of proportion of foreign exchange reserves and foreign exchange’ agent variables M as balance of payment, and base money’ agent variables as money supply. This paper has 2 made theoretical and empirical analysis on the influence of balance of payment with money supply since reform of exchange rate system in 1994. It reveals the current balance of payment’s transmission mechanism which affects money supply: Monetary demand mechanism and exchange rate arrangements mechanism, then reached the following conclusions: (1) Foreign exchange reserves is closely related to M , and foreign exchange reserves is the main reason for M ’ significant Granger. (2) Proportion of 2 2 foreign exchange reserves shows positive correlation with base money. With increase of foreign exchange reserves, proportion of foreign exchange reserves increasingly i