What is the circulation of RMB?

How much currency supply is needed for the real economy of the country, and what are the categories of the virtual economy?

1 thought on “What is the circulation of RMB?”

  1. Law of currency demand

    Calculation of currency demand

    The calculation of currency circulation speed

    empirical inspection of currency circulation speed

    The formula of the law of currency circulation

    Muchor how much currency in a country will depend on:
    ① the scale of commodity exchange. That is, the total amount of commodity prices exchanged during a period, which is determined by two factors: the number of commodities and the product prices of various commodities. If the price has been determined, the larger the amount of commodities in circulation, the larger the amount of money required. If the amount of commodities in circulation is set, the amount of currency required in the last circulation depends on the price level of the commodity. The higher the price, the more the amount of money is required. Therefore, the amount of currency required in circulation is always proportional to the total price of the product, that is, the two factors of the number of goods and the price of the product.
    ② currency circulation speed, that is, the number of times the same currency transferred within a certain period of time. The amount of currency volume required in circulation is inverse ratio of the circulation speed of currency: that is, the number of currency circulation increases, and the amount of currency required in circulation will decrease; the number of currency circulation decreases, and the amount of currency will increase. It is precisely because of the factors of currency circulation that the actual amount of currency in circulation is always smaller than the total price of the product.
    Therefore, the relationship between the amount of currency in the circulation of goods and the total price of the commodity price, the speed of currency circulation, the formula can be expressed as follows:
    The total number of goods in the same unit of currency The amount of currency required
    can be seen that according to Marx's currency circulation law, the level of price and social goods can be proportional to the necessary amount of currency in the circulation; Essence
    It should be pointed out that Marx's currency circulation law is proposed under the condition of metal currency circulation. Under the condition of non -cashless banknotes, because the banknote itself has no inherent value, too much banknotes will not automatically exit the circulation. Therefore, when the supply and currency circulation speed for social goods, the number of banknotes in circulation determines the general price level.

    The factors that determine currency circulation
    According to this law, the amount of money required in the circulation of goods depends on three factors:
    ① participating in the amount of commodity;
    ② the price level of goods;
    ③ the circulation speed of currency.
    The three factors that affect the amount of currency in circulation can change according to different directions and different ratios. Therefore, there may be a variety of combinations to be realized and the amount of currency circulation restricted by the total price. When the price of goods remains unchanged, due to the increase in the amount of commodity in circulation, or the slowdown in currency circulation, or the two cases occur at the same time, the currency circulation will increase. Conversely, due to the decrease in commodity or the speed of currency circulation, currency circulation will decrease. When the price of commodities is generally increased, if the amount of commodity in circulation is reduced or circulating, the amount of commodities will remain unchanged, and the currency circulation speed will increase according to the same proportion, and the currency circulation will remain unchanged. If the amount of commodity decreases or the speed of currency circulation has increased faster than the increase in price, currency circulation will decrease. When commodity prices generally decline, if the amount of goods increases at the same proportion, or the currency circulation speed slows down at the same proportion, currency circulation will remain unchanged. If the increase in commodity volume or the slowdown in currency circulation is faster than the decline in the price of commodities, currency circulation will increase.
    The currency circulation depends on the rules of the total price of commodity prices and currency circulation. This can also be expressed as follows: the total speed of the total value of the product and the average speed of currency circulation, the amount of currency in circulation depends on the value of the currency itself. That is to say, under the conditions of other conditions, the amount of currency in circulation is determined by its own value.

    The new progress of the theoretical research of currency circulation in 1985

    In my country, the amount of currency can be divided into the following three levels:

    M0 — cash;

    M1 —— M0 can directly issue transfer and settlement vouchers from the account to purchase aimed deposit of goods;

    M2 —— M1 urban and rural savings deposits finance Valley deposits unit regular deposits exchange funds.

    The M1 is a currency in circulation, and it is a quasi -currency or currency to be circulated. We plan to regulate currency circulation. At present, M1 should be subject, and M0 needs to be paid special attention to.

    The measurement model of currency needs, there are two types of opinions. One type of opinion advocates that we should use a relatively simple measurement model at present; a type of opinion advocates using a complex measurement model.

    The people think that there are three methods that are simple and easy to do:

    (1) proportional method. According to historical data, the proportional coefficient between economic growth and currency growth, and then refer to the planning adjustment range of the price to determine the growth rate of the amount of currency.

    (2) Return analysis method. According to some factors related to the amount of currency, the correlation between them is determined by historical data, so as to determine the amount of money.

    (3) The basic formula method is based on Marx's currency demand formula M = PQ/V (where P is the price level, Q is the number of goods, V is the currency circulation speed). Calculating the amount of currency based on this formula is how to determine the speed of currency circulation in the calculation period. The historical situation of currency circulation in my country for more than 30 years is that the speed of currency circulation has decreased, especially in the year when the economic system changes and the growth rate of the currency income is rapid, and the decrease in currency circulation has a large rate. In the previous period, the speed of currency circulation was based on the change of currency circulation speed, and found that the rate of calculation of futures currency circulation was found to determine the amount of currency required for the calculation period. You can also analyze the factors that affect the speed of currency circulation according to the actual situation of my country, and the functional relationship of these factors and the speed of currency circulation. On the basis of the early currency circulation speed, analyze the changes of these factors to determine the speed of currency circulation during the calculation period.

    The comrades believe that because the circulation industry has a flexible capacity for currency, the amount of currency needs in a certain period of time is not a number, but a range. The increase in the amount of currency can also be simplified to:

    The currency growth rate = economic plan growth rate plan adjustment amplitude ± currency circulation speed change rate

    Under the planned economic conditions of socialism, currency supply cannot be naturally equal to the amount of currency. To ensure the balance of currency, we must not only study the amount of currency, but also the currency supply. In 1985, my country's financial theory and actual work departments studied the theory and model of currency supply and achieved certain results.

    The measurement model about my country's currency supply volume, generally there are two opinions:

    One opinion is a model that uses Western countries to calculate the amount of currency supply, that is, M = M · B. M is a currency supply, M is a currency multiplication, and B is the basic currency (professional banks are prepared to add cash in the deposit of central banks). Currency multiplication M also uses Western formula m = 1 k/r k. R is the preparation rate of deposit, K is the cash leakage rate, that is, the ratio of the cash in the deposit.

    . Another opinion, advocating to determine my country's basic currency and currency multiplication according to the actual situation of China. In our country, the loan of the central bank's loan to professional banks during a certain period (such as one year) can be regarded as the source of the original financial system of professional banks. Professional banks generate multiple currency supply on the basis of this source of original funds. The central bank's loan of professional banks can be used as the basic currency. Professional bank loans participate in the movement of total social funds. Enterprises have obtained loans from banks, engaged in production and commodity circulation, creating and realizing product value, and the decomposition of product value and forming fiscal deposits, corporate deposits, savings deposits, and cash in circulation. According to my country's credit funds management measures, fiscal deposits are liabilities of central banks and do not generate currency multiplications; cash issuance is also a central bank liabilities, which does not generate multiple currency multiplications; These two types of deposits can produce multiple currency multiplications. Therefore, my country's currency multiplication can be used below:

    m = [1/r × (h o)] g/2

    , R is the preparation rate of deposit, H is the ratio of savings deposits to M2, O is the ratio of corporate deposits to M2, G is the ratio of cash to M2.

    The currency supply is equal to currency demand is the balance of currency. At this time, there is no currency overweight and no currency supply. This can achieve the goal of stabilizing currency value and developing economy.

    The significant measurement of whether the currency circulation is normal, whether it has achieved stable currency value, and developing the economy's monetary policy, what is its logo? Some comrades advocate depending on the status and price of the commodity supply and demand. Some comrades advocate that they only depend on whether the price of the goods is stable, or whether the purchasing power of the social currency is balanced and the supply of goods is balanced. 1) Sustainable economic development; (2) the currency value is relatively stable; (3) the increase in actual income of the people. As long as the economic growth rate is greater than the inflation rate, the actual income of the people can be considered as normal currency circulation.

    The currency equilibrium has a lot to do with the central bank's supply of currency, but it cannot be fully decided to be in the central bank. In terms of macroeconomics, the balance of currency determines the economic equilibrium, that is, the proportion relationship of the national economy. In terms of micro -economy, the balance of currency determines economic benefits. For example, when the nominal wage growth rate exceeds the growth rate of labor productivity, the currency overweight may be formed. In my country, the People's Bank of China as the Central Bank, it plans to regulate currency circulation to ensure the balance of currency and have an important role. How does the central bank plan to control currency supply and ensure the balance of currency? There are three methods to choose from, that is, the combination of direct control, indirect control, direct control and indirect control. Although direct control can achieve obvious results in controlling the control of currency in the short term, the initiative and enthusiasm of professional banks have been limited. The method of direct control is completely contradictory with the direction of my country's economic system reform. Indirect control must have the corresponding market mechanism and financial system. At present, my country does not have the conditions for completely indirect control. Therefore, some comrades advocate that my country should currently adopt a method of direct control and indirect control to control the money supply.

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