However, the size, trend and reasons of M2/GDP ratio are influenced by many different factors. M2/GDP actually measures the proportion of all economic transactions with money as the medium.

Generally speaking, it is the primary index to measure a country's economic financialization. Generally speaking, the greater the ratio, the higher the degree of economic monetization.

Although the ratio of M2/GDP usually reflects the importance of financial institutions' development in the market or their contribution to personal savings, as a traditional indicator of financial deepening, they are only positively correlated in a mature financial system.

Extended data:

The influence of M2/ GDP on inflation;

In the economic operation, the total demand increases excessively, exceeding the established price level, and the supply of goods and services leads to inflation.

Demand-driven inflation refers to inflation caused by excessive growth of total demand. According to Keynes's explanation, if the total demand rises to a level greater than the total supply, excessive demand will cause a general rise in the price level.

In China, fiscal deficit, credit expansion, investment demand expansion and consumer demand expansion often lead to the emergence of demand-driven inflation in China.

Paper money is issued and used by countries or regions. Under the condition of currency circulation, if the circulation of paper money exceeds the actual demand in circulation, the surplus will continue to circulate, which will cause inflation.

The direct cause of inflation is the increase of national currency circulation. The government usually issues more money to make up the fiscal deficit, or stimulate economic growth, or balance the exchange rate.

Inflation may lead to the transfer of social wealth to the rich, but generally speaking, inflation is the inevitable result of the state taking measures to effectively affect the macroeconomic operation. Many economists believe that moderate and benign inflation is beneficial to economic development.

Baidu encyclopedia-inflation

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