The Effect of Money Supply on the Prices of Different Agricultural Products

In the past 20 years, China has experienced three times of severe inflation. Although the reasons for each inflation are different, the price fluctuations of agricultural products are higher than that of industrial products. This article was based on agricultural product price fluctuation which is influenced by the money supply, namely under the condition of agricultural prices overshoot. In the current economic situation, especially since the global financial crisis in 2008, in order to alleviate employment pressure and stimulate economic growth, the governments is generally adopted a loose monetary policy which lead to the surging prices. So this paper will make a further discussion about the relationship between money supply and the prices of different agricultural goods.