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Frontiers of Economics in China

ISSN 1673-3444

ISSN 1673-3568(Online)

CN 11-5744/F

Postal Subscription Code 80-978

Front Econ Chin    2008, Vol. 3 Issue (4) : 497-512    https://doi.org/10.1007/s11459-008-0024-6
research-article |
The relationship among money supply, banking lending and aggregate demand in China: 1994-2006
LI Qiong , WANG Zhiwei
School of Economics, Peking University, Beijing 100871, China;
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Abstract

Based on the framework of Bernanke & Blinader (1988) and Walsh (2003), this paper provides a concise analysis for relationship among money supply, banking lending and aggregate demand; and makes an empirical test on relationship among China’s money supply, banking lending and aggregate demand from 1994 to 2006 by adopting the single-equation regressive model and vector autoregressive model in terms of Keynesian structural model and monetarism simplified model. The result shows that money supply and banking lending have both played a driving role on real economy. Because of non-market interest rates, Keynesian structural model cannot explain the transmission mechanism of China monetary policies better than monetarism simplified model.

Keywords money supply      banking lending      aggregate demand     
Corresponding Authors: WANG Zhiwei,Email:zhiwei_wang789@sina.com   
Issue Date: 05 December 2008
 Cite this article:   
LI Qiong,WANG Zhiwei. The relationship among money supply, banking lending and aggregate demand in China: 1994-2006[J]. Front Econ Chin, 2008, 3(4): 497-512.
 URL:  
http://academic.hep.com.cn/fec/EN/10.1007/s11459-008-0024-6
http://academic.hep.com.cn/fec/EN/Y2008/V3/I4/497
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