Impact of internet finance on the effectiveness of monetary policy: an economic analysis based on the framework of microeconomics of banking
(2.APEC Research Center of Nankai University 300071)
【Abstract】By introducing the impact of internet finance on residents’ asset selection and deposit supply into the theoretical framework of microeconomics of banking, this paper theoretically analyzes the impact of internet finance on the conduction effectiveness of price-based and quantitative monetary policy. The results show that the development of internet finance increases the sensitivity of bank deposit and loan scale and interest rates to interbank offered rate, and improves the effectiveness of the price-based monetary policy. The development of internet finance enhances the fluctuation of narrow monetary multiplier, increases the supply of broad money and reduces the velocity of money circulation. Meanwhile, with the data collected from internet finance, the People’s Bank of China (PBOC) and interbank market, this paper empirically analyzes the effect of internet finance on the effectiveness of monetary policy, and the results support the key conclusions obtained from the theoretical model.
【Keywords】 internet finance; interest rates; monetary policy; money supply;
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