Author(s)

Qi-qing Zhou, Changhao Hu

Corresponding Author

Qiqing Zhou

ABSTRACT

Based on the money quantity theory, this paper selects the data from 1996 to 2016, and uses the grey relational analysis model to comprehensively discuss the correlation between the money supply at all levels and various price indexes in China. Empirical analysis shows that there is a significant relationship between money supply and price level. M2 has the biggest influence on various price indexes, Quasi-currency has a greater impact on price indexes than M1, and the correlation between money supply and price index at different levels is different between urban and rural areas.

KEYWORDS

Money supply; Price index; Correlation; Grey Relational Analysis