The problem of money supply has always been highly valued by central banks and monetary authorities in various countries, and it is also a major issue that economists in various countries have been paying attention to. The reason lies in whether the money supply is appropriate or not, which will directly affect the economic development of all countries. Excessive money supply easily leads to inflation, while insufficient money supply easily leads to deflation. Inflation and deflation are not conducive to sustainable economic growth. In the period of pursuing sustainable economic growth and building a harmonious society, it is more practical to discuss the moderate growth of money supply.
For a long time, when people discuss the money supply, they mostly pay attention to its consequences. Whether it is the "camera choice" of Keynesian school or the "single rule" of modern monetary school, whether it is the exogenous theory of money supply or the endogenous theory of money supply, it attaches great importance to controlling the result of money supply in order to keep the money supply moderate. The famous money supply theories such as Friedman, Schwartz, Kagan, brenner and Mertz focused on the factors that affect the money supply, and they made important achievements in choosing the factors that affect the money supply, which provided important basis and guidance for the later money supply research. J?tunheimr developed the research results of Friedman and others, put forward the famous J?tunheimr model, and concentrated on the important influence of various main factors on the money supply. Since it came out, it has been regarded as an understanding and research of money supply. With the increasingly complex relationship between money and economy and the in-depth study of money supply, people need to know more about the process of various factors affecting money supply. Post-Keynesian scholars strongly advocate the "endogenous theory" of money, believing that money supply is a dependent variable of economic operation and cannot be changed at will by the monetary management authorities. Britain's Radcliffe Report, Gail, Shaw, Moore and others have all studied the endogeneity of money supply.
At present, there is a clear view on whether the money supply is endogenous or exogenous. As far as the starting point of an economy is concerned, the monetary authority or government needs to invest a certain amount of money to play the role of the first driving force of money. Under the existing credit currency system, once the economy operates, a large amount of endogenous demand will inevitably lead to a large amount of endogenous money supply. How to develop this money supply process is an important issue worthy of attention and study, especially in the period of great economic system reform in China. Studying this problem is not only of practical significance, but also of great theoretical significance.
Professor Yang Li's Adaptive Money Supply, in my opinion, is a masterpiece devoted to studying the process of money supply. Professor Yang creatively put forward the concept of adaptive money supply in his works, arguing that "a large part of endogenous money supply is created by deposit institutions to meet the demand for money".