In this paper, we use the second-order local adjustment model to quantitatively estimate the demand function of money in China. The results show that the actual output, the nominal interest rate, the inflation rate, the stock market value and the monetary replacement rate have a significant impact on China's narrow and broad money demand. The analysis shows that China's interest rate and exchange rate policy in recent years is still the main task of stabilizing inflation. By adjusting monetary policy such as interest rate adjustment or RMB appreciation to improve the situation of money supply and demand in our country, we should pay more attention to the macroeconomic variables. The impact of dynamic.

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