Study on Factors Affecting Money Supply Based on Multiple Regression Model

Abstract

Governments around the world have carried out macroeconomic regulation through monetary and fiscal policies to promote national economy stable and healthy. Through monetary policy, People’s Bank of China has handled the relationship among maintaining steady economic development, adjusting economic structure and managing inflation expectations. Using instruments of monetary policy affecting intermediate targets and through changing intermediate targets, monetary policy achieves final targets. Intermediate target of monetary policy, money supply, has a very important role in macroeconomic regulation. Through establishing multiple regression model, this paper selected annual data from 1990 to 2008 as sample data, quantitative studied factors affecting money supply and provided reference for drawing up monetary policy in China.