Empirical Analysis of Changes in China's Currency Circulation Velocity in the New Century

Abstract

This article will first derive the theory of money multiplier and explain its relationship with the velocity of money circulation through the theory of money quantity. Based on the theory of monetary multiplier, first analyze the actual specific value of China's monetary multiplier in the new century from its definition formula; Starting from the factor composition of the monetary multiplier, construct a factor model of the monetary multiplier, calculate the specific values of the base currency, statutory reserve requirement ratio, cash ratio, etc. and the actual specific values of the monetary multiplier obtained from the definition formula, and compare their differences with the official published data. And creatively use breakpoint regression method to analyze the changes in domestic monetary multiplier after the establishment of the new government leadership collective in 2013.