The Measure of Excessive Money Issuance in China
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| Title | The Measure of Excessive Money Issuance in China
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| Author | Zhang Qiaoyun and Zhang Jun |
| Organization | Institute of Finance, Southwestern University of Finance and Economics |
| Email | zhang888@swufe.edu.cn；johnzj123123@163.com |
| Key Words | Excessive Money Issuance；DSGE Model；Money Supply；Money Demand |
| Abstract | Excessive money issuance refers to the amount that money supply exceeds money demand of an economy. In this paper, we use two measures of excessive money issuance, accumulative excessive money issuance and annual excessive money issuance. We build a DSGE model to simulate the equilibrium amount of money from 1984 to 2010, and calculate accumulative excessive money issuance and annual excessive money issuance respectively. Our analysis shows that the excessive money issuance appeared in 1993. Since then, excessive money issuance has been a regular economic phenomenon and an important characteristic of financial deepening. During our sample period, annual excessive money issuance reached its highest point between 2008 and 2010. The increasing of excessive money issuance effectively decreases the functioning of money. |
| Serial Number | WP438 |
| Time | 2013-04-26 |
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