LI Qiong , WANG Zhiwei
Author information
School of Economics, Peking University, Beijing 100871, China
E-mail: zhiwei_wang789@sina.com(WANG Zhiwei)
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.
money supply , banking lending , aggregate demand
LI Qiong, WANG Zhiwei. The relationship among money supply, banking lending and aggregate demand in China: 1994-2006. Front Econ Chin, 2008, 3(4): 497‒512 https://doi.org/10.1007/s11459-008-0024-6