analysis of the money supply impact on the cpi and gdp（分析货币供应量对cpi和gdp的影响）.doc

Analysis of the money supply impact on the CPI and GDP Abstract: China’s specific conditions, by empirical findings, long term changes in money supply and prices have a significant relationship with changes in output is not necessarily related, so the money is neutral in the long run, output changes mainly determined by the real sector factors, while both in the short or long term, changes in money supply will have an impact on prices. the use of our 1978-2008 annual data, from the M0 money supply perspective, the establishment of distributed lag model, analysis of dynamic M0 money supply of China’s economic development. Keywords: inflation; money supply; economic growth 1 Introduction With the spread of the international financial crisis, China’s economy from the second half of 2008 a sharp decline, although our government has taken strong measures, but a strong rebound in the economy has yet to enter the road from the price point of view, since April 2007, residents of China rising general price level in 2007, annual CPI index rose 4.8% in February 2008 CPI index up 8.7%, a record high. the next few months the CPI and PPI fell sharply, has been negative for several months, as In July 2009, CPI fell 1.8% PPI down 8.2%. At the same time high money supply stabilization of the end of July 2009, broad money supply (M2) amounted to 57.3 trillion yuan, up 28.42%, an increase over the previous year by 10.6 percent, 0.03 percentage points lower than the previous month end; narrow money supply (M1) amounted to 19.59 trillion yuan, up 26.37 percent, 1.6 percentage points from the previous month; market currency in circulation (M0) amounted to 3.42 trillion yuan, an increase of 11.59%, while China’s dependence on foreign expansion of internal and external imbalances, the virtual economy has been expanding, the central bank base money passively. monetary growth rate rose, although not the only cause of inflation, but closely linked to the increase in money suppl