Virtual money demand document
in the era of stand-alone games, the protagonist accumulates money by knocking down the enemy, entering the gambling house to win money, etc., which can be used to buy Herbs and equipment, but only in his own game console; The special currency issued by the portal website or instant messaging service provider is used to purchase the services within the website
there are four types of virtual currency in the market:
1. Game currency developed by game operators for players to use as a trading medium in online games
2. A special virtual currency issued by the portal or instant messaging tools for use in the operating cyberspace
3. Interactive virtual currency, which can be used in the issuing entity of virtual currency and can purchase goods and services from non issuing entities
4. Based on cryptography and modern network P2P technology, a special electronic and digital network cryptocurrency is proced through complex mathematical algorithm
the instrialization of virtual money will form a virtual money market. If the emergence of the stock market is the proct of the combination of instrial capital and financial capital, then virtual currency will be the proct of the combination of service capital and financial capital. Modern service instry, especially personalized modern information service instry, will become the instrial foundation of personalized virtual currency
the personalized virtual money market is different from the stock market and derivative financial instrument market. The latter is more established for the needs of instrialization, which is also reflected in meeting the needs of the so-called modern service instry; The instrial foundation of the former is closely related to the demand of informatization
The future of the tertiary instry is different from the service instry, its development direction is the post-modern service instry, that is, the experience instry, that is, more personalized instry to meet the development needs of spirit, culture and entertainment. The stock market will make more use of information to guide the rational investment of instry and service instry, while the personalized virtual money market will make more use of information to guide the perceptual consumption of experience instrywarm tips:
1. The above information is for reference only, without any suggestions
2. It is risky to enter the market and investment should be cautious. Before making any investment, you should make sure that you fully understand the nature of the investment and the risks involved in the proct. After a detailed understanding and careful evaluation of the proct, you can judge whether to participate in the transaction
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1、 Common analysis of virtual currency (1) bitcoin solution is designed and created by Japanese programmer Nakamoto (alias) in 2009, and it is the most successful and controversial network currency at present. Bitcoin scheme is based on P2P network architecture, which has been operating in the world, and can be used for all kinds of virtual and real goods and services transactions
In theory, if the existence of network currency affects the demand for the central bank's liabilities, and then interferes with the central bank's open market operation, it will have an impact on a country's monetary policy and price stability. However, from a practical point of view, the premise of network currency affecting price stability includes the following three aspects:(1) from the analysis of the impact on the amount of money, although it is difficult to analyze the extent to which the network currency scheme creates money in the case of lack of information
However,however, most Internet money systems operate in prepaid mode, that is, issuing Internet money when the real money is exchanged in and withdrawing money when the real money is exchanged out. In the famous network currency scheme, the supply of money is stable and the supply is small, but we still need to be vigilant whether it can ensure that the money supply will maintain a stable level in the long run, and the impact of the change of exchange rate between network currency and real currency
(2) from the analysis of the impact on the speed of money circulation, the use of cash and money statistics, the impact of the technological innovation brought by the network currency scheme on the speed of money circulation is not clear
as an Internet instry, it largely depends on the number of active internet currency scheme users. If the network currency is widely accepted, it will have a substitution effect on the real currency of the central bank, thus recing the use of cash in transactions
in this case, the scale of the central bank's balance sheet will be reced, and its ability to influence short-term interest rates will also be weakened. The central bank will need to fight against risks through ways such as setting minimum reserves for cyber currencies. Substitution effect will aggravate the difficulty of monetary statistics and affect the relationship between monetary statistics and inflation, which is not concive to the realization of long-term price stability. In addition, the issuance of network currency outside the central bank and the expansion of virtual credit will have an impact on the central bank's interest rate decision in the economy and weaken the central bank's monetary control
(3) from the analysis of the interaction between network currency and real economy, network currency can act as a real commodity trading medium and have an impact on real GDP
The influence of network money on real money supply depends on two aspects: one is the substitution effect of virtual economy on real economy; the other is the substitution effect of virtual economy on real economy; The second is the crowding out effect of Internet money on real money, that is, with the increase of the total amount of Internet money, the amount of cash held by the public in real life decreases, resulting in the decrease of cash / deposit ratio and the increase of money multiplier. In reality, the network virtual currency scheme will not affect the price stability at this stage, and the money flow speed will not be significantly affected in the short and medium term. However, the interaction between network currency and real economy deserves attention (2) financial stability risk when the virtual currency scheme operates outside the banking system, the most important factor of financial instability lies in its connection with the real economy, namely exchange rate and exchange market. Obviously, the closed network currency scheme and the one-way flow network currency scheme are not affected, so we should focus on the two-way flow network currency scheme. The value of two-way network currency depends on the level of money supply and demand in the exchange market. A big difference between network currency and real currency is that the network currency scheme is not based on the country or currency region, and the influence of virtual economy intensity, trade or proction capacity on its exchange rate is limited. The price of virtual money and its fluctuation depend on five factors:(1) money supply and other actions taken by currency issuers. For example: to achieve a fixed or semi fixed exchange rate by intervening in the market
(2) the network currency scheme shows network externality, and its monetary value depends on the number of users and merchants. As the number of consumers and businesses increases, their monetary value will increase accordingly. In addition, the exchange rate of network currency with small transaction volume fluctuates more(3) the virtual community with clear and transparent policies and advanced security measures is easier to boost confidence and the currency is stronger
(4) the reputation of network currency issuers in fulfilling their commitments. There is no "lender of last resort" in the virtual community, and the trust gained by the issuer is crucial to the exchange rate of internet currency
(5)
speculation on the future value of Internet money and cyber attacks on virtual communities. Due to the immaturity of the system, low trading, speculative activities and network attacks, the two-way network currency scheme is inherently unstable
qualitative. At present, the trading volume of these network currencies is small and the correlation with the real economy is low, so the stability of the financial system will not be affected. However, if Internet money becomes a substitute for traditional money in the future, it will bring instability to the financial system and even distort the relative prices of goods and services. The impact of network currency system on the financial system largely depends on the number of active users and the number of merchants who are willing to accept virtual currency for real transactions. In addition, virtual currency has only exchange value and no use value. Generally, network currency is not based on assets with intrinsic value and is not supported by central bank credit. At present, these network monetary systems are not allowed to lend
or borrow funds, so it can not pose a threat to the stability of the financial system, but we should pay close attention to its development. If there is any change in the future, it will undoubtedly have an impact on the financial system
in a specific virtual community, virtual currency payment activities have evolved into a "real" payment system, facing typical risks related to the payment system: credit risk, liquidity risk, operational risk and legal risk. The nature, scale and ration of these risks are largely determined by the design of the system or the degree of lack of liquidity, so it is difficult for the network virtual currency scheme to avoid or control these risks. According to the core principles of payment system (CP) issued by the bank for International Settlements (BIS), the network virtual currency scheme does not conform to most of the contents of CP, and does not belong to the systemically important payment system. Therefore, it will not cause
or transmit shocks in the global financial system. At present, there is no systematic risk in the network currency system outside these virtual communities
2. Lack of corresponding supervision and protection mechanism
in the real economy, the central bank plays the role of lender of last resort and has no default risk, so it can take actions in the case of payment crisis or unpredictable liquidity shortage to avoid chain reaction. However, in the network virtual currency scheme
it is impossible to use network currency as settlement asset. Because network currency simply depends on the credibility of the issuer, it can not be widely accepted as a means of payment, so network currency can not be regarded as a safe currency. In addition, commercial banks are required to accept prudential supervision, which reces the possibility of default, and the security of money in commercial bank accounts is higher than that of network currency. A fundamental risk of network currency is that the settlement institution of network currency scheme is not subject to any supervision, no institution is responsible for its behavior, and there is no investor / depositor protection mechanism, which causes the user to bear all the risks
supervision and the anonymity, invisibility and difficulty in tracking of its transactions, the network virtual currency scheme is very easy to be used by terrorist activities, fraud, money laundering and other illegal activities. At present, many government departments in many countries are considering whether to recognize or
legalize these virtual schemes and bring them into the scope of supervision, so as to support the innovation of currency and payment forms, protect the rights and interests of consumers and financial stability, and inhibit the use of virtual currency schemes to engage in criminal activities
at present, the uncertainty of the legal status of the virtual currency scheme may also bring challenges to the government authorities (5) reputation risk of monetary authority the reputation of Monetary Authority (central bank) is the key factor to determine the effectiveness of monetary policy. The public's trust in fiat money is closely related to the image of the central bank, which pays close attention to its reputation. The ECB defines reputation risk as the risk of deterioration of reputation, credit or public image. As the network currency scheme is related to money and payment, it is generally believed that it belongs to the responsibility of the central bank, so we should be alert to the reputation risk it may bring to the central bank. However, in the case of small scale, the impact of the failure of the network currency scheme is limited, but its high volatility and instability also aggravate the possibility of failure and attract extensive media coverage. If the network currency is allowed to develop continuously without
regulation, the central bank may be considered as dereliction of ty and affect its reputation (6) the risk of investors' loss
for exchange value, the public has a higher recognition of the investment value of network virtual currency, and it is investment based transactions that accelerate the formation of virtual currency market. Like other investment markets, participants in virtual money market will also face potential losses caused by market risk, credit risk and policy risk. Take bitcoin as an example: from 2009 to early 2010, bitcoin was worthless; In the summer of 2010, bitcoin trading began to enter the golden
period. As the supply was far less than the demand, the value of online trading began to rise. In early November, bitcoin was silent at 29 cents for many days, and then jumped to 36 cents; In February 2011, bitcoin continued to appreciate, and its exchange rate with us dollar
reached 1:1; In 2013, the price of bitcoin achieved a "Big Bang" growth, and hit US $1242 on November 29, 2013, surpassing the gold price of US $1241.98/ounce in the same period. Fierce price fluctuations make market participants face huge speculative risks. Unlike mature capital markets such as stocks and bonds, the depth of bitcoin market is insufficient, and it is mainly held in the hands of large investors with low degree of diversification. Bitcoin price is easily affected by large investors' buying and selling behavior, and also easily manipulated by speculators. At the same time, different countries have different attitudes towards bitcoin, Germany, the United States and other countries hold an open and supportive attitude, and Thailand, Brazil and other countries regard bitcoin related activities
as illegal. Every country's attitude and measures will have a significant impact on the price of bitcoin, especially in the short term
virtual currency is always inferior to real currency< br />
Background: the financial application of blockchain technology brings high investment value
2018 China international big data instry Expo opened in Guiyang City, Guizhou Province on the 26th. At the meeting, it was pointed out that China will vigorously develop the digital economy in the future, deeply implement the action plan for the development of big data and cloud computing, and deeply study blockchain technology and application. Especially in the field of finance, the landing application has become the focus of the scientific and financial circles
1. The value source of blockchain is that it can perfectly solve the pain points of the current financial instry:
in today's asset securitization, insurance, supply chain finance, commodity trading, asset custody and other financial scenarios, e to many participants, high cost of credit evaluation, low settlement efficiency of intermediary institutions and other reasons, Traditional financial service methods are difficult to effectively solve the long-standing core pain points in the instry, such as information asymmetry, complex and rendant processes, and high information verification cost
2. Why can blockchain solve the above pain points:
blockchain technology integrates many basic technologies, such as distributed accounting, tamper proof, built-in contract, etc., and constructs a trust building mechanism with lower cost. The financial application based on blockchain technology can realize the ability of all market participants to obtain all transaction information and asset ownership records in the market without discrimination, and effectively solve the problem of information asymmetry; Smart contract embedding reces the error rate of payment and settlement, simplifies the process and improves efficiency; At the same time, based on transparent information and brand-new trust mechanism, there is no need to spend manpower, material resources and financial resources to confirm information among participants, which will greatly rece the trust cost between institutions, and then rece the price of financial services and transaction costs
3. The application of blockchain technology in the financial field mainly includes the following aspects:
among which bitcoin is the most famous. On the basis of bitcoin, a large number of other types of decentralized digital currencies have been derived. Such as: the heyday of bits
Compared with the traditional payment system, blockchain payment can directly carry out end-to-end payment for both parties without the help of the banking system, which can greatly improve the speed and rece the cost③ digital bills
④ bank credit management: the advantage of blockchain is that it can rely on program algorithm to automatically record credit related information and store it on every computer in the blockchain network, with transparent information, tamper proof and low cost
The major financial institutions and exchanges in Europe and the United States have explored the application research of building the next generation of financial asset trading platform based on blockchain technology4. The development prospect of blockchain. The future development of blockchain technology will have the most vitality with alliance chain as the entry point, and will have a significant effect and far-reaching impact on the transformation of traditional financial instry pain points
in response to the good investment prospects of blockchain, domestic enterprises such as Alibaba, Jingdong and Netcom have entered the market. The application of financial scenarios based on blockchain technology not only brings us security and convenience, but also provides us with broader investment space. The rise and price surge of digital currency represented by bitcoin (bitcoin was about RMB 20 cents when it was first listed in 2009, and its current price is about US $7300!) It's the best proof that people with a keen sense of smell have made a lot of money from it
Abstract: This is an encrypted digital currency based on the bitcoin developed by Nakamoto Tsung, which improves and adds many new functions, such as the double-layer reward system network, also known as the main node network. It also includes anonymous payment to improve the interchangeability (bitage) and real-time payment function docking to realize real-time transaction confirmation without relying on the authority of the center (P2P mall) In 2009, Nakamoto put forward the concept of bitcoin. Since then, bitcoin has spread rapidly in mainstream applications and commercial uses, becoming the first digital currency to attract a large number of users, which is a milestone in the history of digital currency. However, from the perspective of completing the transaction, we can find an important problem, that is, it takes too long for bitcoin block to confirm the transaction. Traditional payment companies have found a solution to enable the buyer and the seller to realize zero confirmation of bitcoin transaction, but this solution usually requires a trusted third party to complete the transaction outside the agreementbitcoin provides pseudonym transaction, realizes the one-to-one transaction relationship between sender and receiver, and can always record the transactions occurred in the whole network. Bitcoin only provides low-level privacy protection, which is well known in academia. Despite this deficiency, many people still believe in the transfer history recorded by blockchain
based on Nakamoto's achievements, bitshengshi is an encrypted digital currency with the purpose of protecting privacy. We have made a series of improvements on the basis of the concept of bitcoin, resulting in a decentralized cryptocurrency with good anonymity. It supports tamper proof real-time transactions, and has a point-to-point sub network that can provide service reward system for bitsheng network
2. Master node network
the whole node is the server running on the P2P network, so that small nodes can use them to accept the dynamic changes from the whole network. These all nodes need significant traffic and other resources that consume a lot of cost. Therefore, it will be observed that the number of these nodes on the bitcoin network presents a steady downward trend over a period of time, so that the block broadcast time needs an additional 40 seconds. In order to solve this problem, many solutions have been put forward, such as the introction of Microsoft Research's new incentive plan and bitnodes incentive plan
Figure 6: Mining reward model
1、 7 * 24 hours trading
the trading time of digital currency is very long, 24 hours a day, 7 days a week, 365 days a year. As long as you like, you can trade whenever you want. There is no time limit
friends who have worked in stocks and futures know that stocks and futures have trading time limits. A few hours of trading time in a day is not enough. Digital currency is a real all-weather trading, which can meet the needs of friends who trade in different periods of time. You can trade whenever you are free, even on weekends, It's just so willful
Second, there is no limit on price rise and price fall.
there is no limit on price rise and price fall in the trading of digital currency, that is to say, it can rise and fall freely without any limit. You can say that there is a huge income space, but you can also think that there is too much risk. This is a matter of different opinions. There are good and bad, because the income and risk are positively related. Digital currency trading platform "currency exchange"
the price demand of the market can be truly reflected without the limit of rise and fall, because the rise and fall of the price is a very natural process. When everyone is optimistic, it will rise, and when they are not optimistic, it will fall. This is the law of price fluctuation, and the limit of rise and fall only adds human intervention to the price fluctuation to slow down the price fluctuation, But it can't really stop the price movement. Therefore, there is no limit on price fluctuation, which is the most real price fluctuation and truly meets the market demand and expectation
(3) t + 0 transaction: Generally speaking, the digital currency bought on the same day can be sold on the same day, that is, it can be sold with the buyer. It sounds very powerful. If the digital currency you buy makes money, you can sell it immediately and make it safe; If there is a little loss, you can also sell it immediately to prevent the loss from further expanding. All t + 0 trading system is really very practical, can be very flexible to deal with the hands of the position Four, two-way transaction digital currency can not only buy long, but also sell short. Most of my friends basically understand buying long and bullish, but they don't understand selling short and bearish. This is actually a reverse thinking, the key point is to judge the direction of rise and fall accurately, at the same time, there is a price difference to earn on the linefor example, we can buy at a low price and then sell at a high price to earn the price difference (buy long and be bullish); You can also sell at a high price first, and then come back at a low price to earn a difference (sell short and put). The operation steps are almost the same. It's just a direction of business
Five, margin system margin trading is to pay a part of the margin to buy the relevant digital currency, just like when you buy a house, you only need to pay a certain down payment to buy the house. This is the legendary leveraged trading, but at present only some platforms have leveraged trading. Margin trading (Leveraged trading) has achieved the goal of "small, broad and big", maximizing the efficiency of capital utilization, expanding both profits and losses. We can treat it dialecticallyThere is no definition and distinction between game currency and stock, derivative financial instruments, especially electronic currency. In fact, there is an internal thread that can run through these different forms of virtual currency, which is the performance maturity of personalized value. We can summarize it logically as follows:
Bank e-money
Bank e-money was initially a kind of "pseudo virtual money". It only has the form of virtual currency, such as digitization and symbolization, but it does not have the essence of virtual currency and has nothing to do with personalization. For example, it is just the counterpart of paper money; It may be issued by the central bank; It may be in the same market as the money market. However, bank e-money has broken through the extension of money, that is, it can also be issued not by the central bank, but by information service providers, as was the case with several early e-money. The second breakthrough is the liquidity of bank e-money, which far exceeds that of ordinary money. Therefore, it implies a challenge to the pricing power of currency price level. For example, in overnight lending, if the same money is turned over several times in the form of electronic money, although from the traditional monetary point of view, nothing has happened, but from the perspective of virtual money circulation speed, it has actually changed the conditions of money price level
credit information currency
stock is the most typical credit information currency. Its essence is virtual and it is a kind of virtual currency with personalized characteristics. It is the most realistic foundation of the current virtual economy. Stock market and derivative financial instrument market constitute a large-scale and unified virtual money market. They are not only based on entity business, but also supported by a wide range of information services such as trust business and insurance business. The so-called unified market refers to that the market as a whole can be exchanged with the money market at the overall level of national income. Historically, only when money forms a unified market, that is, the main body of the national economy is monetized, can the adjustment of money quantity and interest rate on the national economy be discussed. The same is true for the virtual economy. This issue is not without dispute. Although the scale of the virtual economy is several times larger than that of the real economy, a large part of the real economy has not entered the unified market. If the game currency is compared with stocks, its progress in this respect is far from satisfactory. Only through the two stages of entertainment instrialization and instrial entertainment, it is possible to reach the level of unified market
analyzing the stock market and derivative financial instrument market, the biggest difference between the stock market and the general money market is that its circulation speed cannot be directly determined by the central bank. For example, as a virtual currency, the price level of stock index can not be directly determined by the central bank like the interest rate, but by the so-called "confidence" of people. The fundamentals of the central bank and the real capital market can only indirectly determine the stock market, not directly. So I think the stock market is an information market, not a money market
compared with the mature virtual money market, the main characteristics of the stock market are incomplete. The stock market integrates the noise at all reference points (i.e. indivial gain and loss values) into a unified reference value, which is combined with the standard value (utility value on the basis and general equilibrium value) to form the continuous fluctuation of the market around the utility value. Although it is different from the money market with the central bank as the center for orderly centripetal movement, it is not different from the money market. From the point of view of the real virtual money market, the characteristic of this market is the incommensurable personalized fixed value. In this sense, the centralized stock market has not achieved this function, and the independent role of the stock market as the so-called "casino" has not been played. Thirdly,
the fundamental function of personalized credit voucher
virtual currency is to synthesize value on the spot of personality, rather than to determine a rational value in isolation at an equilibrium point separated from the real world. The significance of virtual currency is to establish a value system centered on the final consumer. After the full realization of virtual currency, the single currency with general equivalent function will tend to be backward. Game currency is the experimental field of virtual currency at a higher stage, and it is difficult to be a major task. The ideal virtual currency is the value symbol of the real world. In the general equivalent exchange, the specific use value and the corresponding subject of the specific use value, namely the non-homogeneous needs and personalized needs of people, are completely filtered out. Virtual currency will change all this, through the virtual way, people's heterogeneous needs and personalized needs will be anchored to the fundamentals by indivial reference point, and the value will be synthesized. Therefore, virtual currency must have two sides, one is to have the function of commodity exchange, the other is to have the function of barter. Through the former to overcome the relativity and subjectivity of value, through the latter to achieve personalized value confirmation. In order to achieve this goal, virtual currency must realize a huge transformation, which is to transform to dialogue system and become interactive currency. The bargaining here is aimed at the level of currency price. Recall that the transformation from text to dialogue, which has been realized for decades, is the direction of the transformation of virtual currency. The value of game currency is uncertain. When people exchange game currency, it is uncertain whether the ultimate happiness they may get is above or below the currency value until they participate in the game. The game is a dialogue process. Of course, various value-added functions of game currency have not been developed in combination with personalized information services. If this kind of value-added business is fully developed, game currency will not be used because of the different businesses providing services, which may become an advantage over stocks
a fully personalized virtual currency may be a kind of currency card with additional information, and its value is to be confirmed. Virtual currency with specific undetermined function and resial value, on the one hand, its information can have room for reinterpretation like text, on the other hand, it has the potential of karaoke like redevelopment. Its information value has an open interface and can be added again. If they are exchanged in the secondary market like the stock market, they may float up and down in the basic par value with their personalized information, and they will have more attractiveness like stocks. Game currency only has the function of value circulation, but not the function of market platform, so it is only an imperfect virtual currency. The reason is the lack of corresponding instrial base
however, in China, the price of virtual currency is also affected by policies to a certain extent. Recently, the central bank has tightened its attitude towards digital currency, and the price of bitcoin and other digital currencies has fallen sharply. The digital currency of PBoC is less affected, probably because PBoC has the support of real assets.
(I) money growth rate
in recent 30 years, the growth rate of China's broad money quantity (M2) and narrow money quantity (M1) fluctuated greatly (see the figure below). Since 1979, the span between the highest and lowest growth rate of M1 has reached 31.6%, and the difference between the highest and lowest growth rate of M2 has also been 25%. Especially before 1998, the fluctuation was very intense, and since 1999, the amplitude has shrunk. In addition, over the years, M1 and M2 have grown rapidly. From 1978 to 2007, the average annual growth rates of M1 and M2 were 19.1% and 22.4%, respectively, with the highest annual growth rate of nearly 40%. From the international comparison (see Table 1), China's monetary growth rate is on the high side< (2) the ratio of M1 to M2 is the basic index to measure the strength of monetary liquidity. On the whole, China's currency liquidity shows a downward trend, from 0.82 in 1978 to less than 0.4 since 1995. There are many reasons for the continuous decline of currency liquidity before the first half of the 1990s. First of all, with the advancement of reform and opening up, the vitality of economic growth has been released, and the rapid increase of residents' income has promoted the rapid rise of money demand. Secondly, from the establishment of the two major stock exchanges in 1990 to 1995, it was the initial stage of the development of China's securities market. Before the mid-1990s, when the securities market was very underdeveloped, the number of financial assets that residents could invest was very small. Therefore, a large part of the increased income could only be held in the form of fixed deposits, resulting in M2 growing faster than M1 (see the figure below)
in recent years, the horizontal comparison between China's currency liquidity (M1 / m2) and other countries (see Table 2) shows that China is among the countries with high currency liquidity. One explanation is that the imperfect financial services lead to the relatively high cost of exchange between currency and quasi currency, so residents tend to hold more currency< (3) the ratio of M2 to GDP is also known as the monetization rate of economy, which shows a rising trend in China. When McKinnon proposed to use m2 / GDP as an indicator to measure the real monetary growth level of a country, especially the late developing countries, he pointed out that this ratio is graally increasing in the process of economic development, but in a healthy economy, the degree of monetization will not continue to improve, but will remain relatively stable in a certain range after reaching a certain degree, He thinks the upper limit of this interval is between 1 and 1.2. The monetization rate of China's economy exceeded 1.2 in 1998, then continued to rise, and remained stable at about 1.6 after 2003. This phenomenon reflects the particularity of the change in the amount of money in China's economic development. There are many theoretical studies on this, and the generally accepted explanation is the institutional factor. In the original planned economy system, a large number of investment goods are allocated by the government, and consumer goods are more in kind subsidies, and the transaction behavior of using currency is less. With the transformation of system and marketization, the way of transaction and payment has changed, and the scope of currency transaction has become larger and larger. In addition, in the process of transition, there are some problems, such as the graal release of inhibitory speculative demand caused by planned control, the expansion of excessive capital demand caused by the soft constraints of planned system, etc. these problems jointly promote the super economic growth of money demand and form the situation of rapid rise of monetization index< (1) wealth and income factors
the wealth people have and the income they get in a certain period of time are the upper limit of money holding, and also one of the main factors affecting money demand. Friedman emphasizes the influence of total wealth and wealth composition including human wealth and non-human wealth on money demand, but in reality, it is quite difficult to measure the scale of total wealth and the relative proportion of human wealth and non-human wealth. Therefore, taking national income as the variable of wealth and income in money demand function has become a common practice in money demand research, especially in relevant empirical research
(2) factors affecting the cost of holding money
1. Interest rate. In China's current interest rate system, although there is a market-oriented bond market interest rate, e to the relatively small scale of the bond market, the term structure and risk structure of interest rate are not reasonable enough, which is difficult to reflect the expected return of holding financial assets. Therefore, it should not be used as a variable to measure the opportunity cost of holding money. At present, deposit and loan interest rate of financial institutions is a variable that widely affects the decision-making of economic entities in China, but it has not yet been marketized and is not closely related to the expected return of financial assets, which is obviously different from the concept of interest rate used in western money demand theory. In fact, the deposit interest rate of financial institutions is a kind of expected income for residents to hold money, but the influence of deposit interest rate needs to be further refined, such as the change of interest rate term structure, the influence of interest tax, the negative interest rate caused by the rise of inflation rate, etc., which should be regarded as the adjustment factors of the actual effect of deposit interest rate on money demand
2. Expected inflation rate. Since holding material wealth is also an alternative to holding money, when inflation occurs, the purchasing power of money decreases, while the real value of physical assets remains unchanged. Therefore, the expected inflation rate can be regarded as the expected rate of return of real assets and an opportunity cost of holding money. Some scholars believe that as long as there is no hyperinflation, the adjustment of nominal interest rate can reflect the change of expected inflation rate. Therefore, in the money demand function, only nominal interest rate as the opportunity cost variable is enough. But this view is also based on the mature market economy, the developed financial market and the complete marketization of interest rate, so the nominal interest rate is sensitive to the market and the adjustment speed is fast. For the current situation that the deposit and loan interest rates of financial institutions in China are not fully market-oriented and can not be fully adjusted according to market conditions, the expected inflation rate may still have an independent impact on money demand as the expected rate of return of physical assets
3. Risk asset price and risk preference. Friedman's (1988) classic research on the influence mechanism of stock market price on money demand points out four different ways and mechanisms: one is substitution effect. The rise of stock market price indicates that the income of holding stocks increases, which attracts people to convert their money into stocks and reces the money demand. This effect mainly affects the broad money demand including savings deposits. Second, wealth effect. The rise of stock price means the increase of nominal wealth, which will lead to the increase of consumption demand and the transaction demand of money. Third, portfolio effect. The rise of stock price increases the proportion of risk assets in the asset portfolio. Under the condition of constant risk preference, people will adjust the asset portfolio to restore the original risk level. The way of adjustment is to increase the holding of risk-free assets such as short-term bonds and currencies, thus causing the rise of money demand. Fourth, transaction effect. The rise of stock price is often accompanied by the increase of trading volume in the stock market, which will proce the corresponding money demand to meet or complete these transactions. From the relationship between stock market price and money demand formed by the four effects, substitution effect makes money demand and stock price change in the opposite direction, while the other three effects make money demand and stock price change in the same direction. The total impact of the four effects depends on the power balance between them. Changes in risk appetite will also affect money demand. When people's risk preference rises, the demand for risky assets increases and the demand for money decreases. But it is difficult to measure the risk preference
the development and representativeness of different risk asset markets should be considered when choosing the variables representing the price of risk asset in China's money demand. Different from the interest rate of bond market in mature market economy countries, the development of bond market in China obviously lags behind the economic development and the stock market. The public's participation in the secondary bond market is low, and the bond market plays a more important role in monetary policy operation (central bank's repo and spot bond trading), rather than becoming the main place for economic entities to convert money and risky assets. With the development of stock market in recent years, stock has increasingly become one of the important alternative assets for economic entities to hold money. The change of stock index reflects an opportunity cost of holding money
(3) institutional factors
a series of institutional factors come from various reform measures in the process of China's economic system transition, including the household contract responsibility system, the reform of agricultural procts circulation system and the development of non-state-owned economy including township enterprises, the reform of state-owned enterprises, the implementation and cancellation of the price double track system, and the graal opening-up strategy, etc. The graal establishment of market mechanism has brought about the rapid monetization of economy. Yi Gang (1996) believes that the economic system reform leads to monetization at least through the following five channels, and then forms "lost money": by increasing the transaction demand of residents and enterprises; Through the introction of proction responsibility system in rural areas, thousands of farmers have entered the market; Through the reform of a large number of township enterprises; Through the rapid development of indivial economy and private economy; Through a rapidly growing free market. There are many studies on the influence of institutional factors on China's money demand. As the influence of economic system reform is related to multiple variables, the introction of multiple variables may be more accurate. However, in the empirical analysis, from the perspective of ensuring freedom, appropriate simplification is acceptable. This paper holds that the indicators of economic monetization can be used as the representative of institutional variables
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