The Empirical Analysis of the Multiplier Influence of Electronic Money on Currency in China

Abstract

The emergence of Electronic Money is the inevitable choice of financial innovation. It not only brings convenience of payment, but also brings impact to the monetary multiplier. The paper carries out the regression analysis through Granger causality test, Johansen cointegration test and error correction model for revealing the effects of Electronic Money on monetary multiplier, taking the growth rate “GEM†and the cash leakage rate “c†of the Electronic Money as the independent variables and taking narrow monetary multiplier “m1†and generalized monetary multiplier“m2†as the dependent variables.