Partnered With:

Full text of central bank paper: innovate digital currency with "blockchain + human value"

Read this article in 89 Minutes

The proof of human value is digital money.

Article title: paper of the people's bank of China: research on marketization coordination and big data mechanism of monetary policy
Source: securities times net
Author: zou pingzuo, chief researcher, institute of finance, people's bank of China

The effectiveness of macroeconomic policies depends on the level of information. The wave of informatization caused by the scientific and technological revolution has an impact or even a revolutionary effect on the previous macro-control models. Under the double superposition of market failure and government failure [I], the global economy is in turmoil. The information information generated by the information revolution is increasing exponentially, resulting in the so-called "information explosion", which poses a serious challenge to the government's macro-control. On the positive side, how a government is good at managing and mining information will make the government's efficiency significantly improved; On the bad side, the huge amount of information will lead to the government's "information drowning "[ii] phenomenon, the macro management will be extremely chaotic, and various risks will rise sharply. The information revolution changes the value function, which changes the law of value and the law of economic growth, and destroys the traditional economic theories and models. If the government fails to promptly adjust the macro-management mode, the macro-control will fail, resulting in economic and social crisis [iii].

The year 2020 is an important turning point [iv]. Both the traditional libertarian monetary theory and policy implementation framework and the government-oriented monetary policy framework are challenged by the scientific and technological revolution. Global economy in the beginning of the year with novel coronavirus, the United States election, the breakdown of oil negotiations, and other violent fluctuations, uncertainty as deep as the abyss; China's economy is also shrouded in mist and risks are rising; Central Banks, mainly in the United States, began to drive monetary policy to regulate the economy,With the emergence of digital currency, the currency myth is full of mysterious and unknown charm.

As can be seen from figure 1, China's M2 / GDP index is significantly higher than that of other countries. Many people mistakenly believe that China's money is excessive, and even that China's financial efficiency is very low, so they advocate tightening money. This data is very important as the main economic indicators of national macro-control, which needs to be deeply understood and grasped. It boils down to the following three questions: the first question to be addressed is what is China's GDP? [v] the second problem is how to solve the accurate and timely and sufficient GDP data. The third question is where China's monetary policy will go in the face of huge uncertainty. This series of questions, such as the "gedebach conjecture" in monetary finance, are urgently needed to be answered at present, and are also the questions that people concerned about money, wealth and growth are concerned about every day [vi].

The key is how to solve these problems. The development of information technology and the development of science and technology finance under the background of scientific and technological revolution provide us with the way to solve this problem. That is to establish the micro foundation of monetary policy through the marketization method, give full play to the market's information discovery function, and establish the marketization micro model of monetary policy [vii] by using the Internet, big data, block chain and other technologies, so as to achieve the accuracy, timeliness, integrity and scientific nature of monetary policy. Manage big data of income, wealth, consumption and investment. These data themselves are the means of production. This process of marketization of digital assets will make macroeconomic data clearer, more complete and more accurate in time.

More importantExpand the function of money, so that money and finance become a tool and means to create value.As a tool to create value, money not only has the function of value scale, but also unifies money and value scale. The process of money creation is the process of value creation. Inflation and deflation no longer occur. Money, monetary theory and monetary policy have entered a new era and a new world. This is an epoch-making revolution, no matter which country first realizes it, it will take precedence in evolution and become strong and competitive, just as shang Yang's reform made the state of qin unify China and realize super system dividend.

The first question is, are the GDP figures from China's statistics bureau accurate? This question concerns the overall picture of macroeconomic policy. According to my research, the data released by the national bureau of statistics cannot accurately reflect the real amount of GDP, and there is still a large error. Because of the difference of statistical caliber and national conditions of each country, the GDP of each country cannot be compared. If the dogmatic application of the traditional monetary policy model, there will be a clear "monetary policy failure." Therefore, the data of the national bureau of statistics should not be taken as the sole basis for decision-making, but the big data model of GDP should be established and the management should be market-oriented, microcosmic and dynamic.

The question of China's GDP is indeed a question of right and wrong for macroeconomic regulation, and there should be no ambiguity. In 2015, the international monetary fund (IMF) predicted for the first time in its latest report that the "American era" was coming to an end, that China's GDP in purchasing power parity terms would surpass that of the us in five years and that 2016 would be the "first year of the Chinese century". This news is like throwing out a "heavy bomb", in the western countries caused controversy, the media have issued doubts, anxiety, exclamation and other different voices. In fact, this algorithm is not scientific, the key to calculate the RMB exchange rate with purchasing power parity is to choose the target of goods, from the current situation, some Chinese goods are overvalued, some goods are undervalued. At present, the prices of major agricultural products and consumer durables in China are higher than those of foreign countries in terms of PPP. The IMF's conclusion is inconclusive [viii].

On the other side of the coin, we should see that China's GDP is different from that of any other country, and the actual statistics are far underestimated, which is an important aspect of the so-called Chinese characteristics. Macro managers must have a clear understanding of the problem of "GDP statistical leakage ", otherwise "government failure" will become the norm, and macroeconomic management will be like a blind man and an elephant [ix].

China's GDP distortion (also called underestimation) can be discussed logically and empirically, and it can be studied from five aspects.

First, China's economic structure is very complex.The economy is dominated by households, with a large number of state-owned and centrally controlled enterprises.The economic subject between a family is often not remunerative, for example, the son works for the Lao tzu is not income, the rural family's income is not GDP. Asset transfers between soes (unlisted soes) are also internal transactions.

Second, China has a low degree of marketization.A large number of products and services do not enter the transaction process due to unclear property rights and are not yet commodities.Markets are about finding value and information. The statisticality of a country's GDP is in direct proportion to its marketization degree. First, a large number of intangible assets in China, such as intellectual property rights, works of art and antiques, do not have clear property rights. In addition to affecting their efficiency, most of these intangible assets cannot be traded, and the number is very large. The second isA large number of service products in China are unable to become commodities, such as legal services, social services and so on.Third, China currently has a large number ofMeans of production such as rural land do not have clear property rights, unable to trade.

Third, China is a country with public ownership of the means of production. The transaction of the means of production is mainly the right to use, such as land, mines, real estate and other immovable property rights. These assets are bound to affect the output price of commodities and will be lower than the ownership assets. This piece affects GDP to some degree and different assets [x].

Fourth, China has a large number of public goods [xi], which not only makes the GDP seriously underestimated, but also changes the consumption rate of China, because most public goods only count the investment but not the consumption. Public goods in China are different from those in western countries. One is that the huge government system and its subsidiary organizations' own consumption and so on have the nature of public goods and the quantity is astonishing. General government departments have a large amount of consumption and service expenditure. These expenditures include insurance, housing, food, transportation, services, medical treatment, education, even health care, travel, going abroad, entertainment, fitness and so on for so-called "system personnel" such as civil servants and career degrees, which are paid by the state or free of charge. For example, all government agencies have free canteens, and some even have kindergartens. Office workers are still assigned housing. Civil servant medical treatment expenses also reimburse, some units have barber shop, hospital, stadium, cinema and so on. Second, China's state-owned enterprises produce a large number of products and facilities are public goods and "quasi-public goods." This is a large amount, every year there are hundreds of millions of, such as roads, parks, squares, water conservancy, stadium and so on. Third, a large number of service industries in China are provided by the government, such as security, education, culture, law and so on. The degree of commercialization is far lower than that of market economy countries. The outbreak of novel coronavirus in 2020 reflects the huge number of public goods in China.

Public goods are often only investment without consumption statistics, leading many economists to believe that China's consumption is insufficient, and the introduction of policies to encourage consumption has led to a sharp rise in Chinese household debt in recent years. In fact, China's consumption data are seriously distorted. A fair number of people can live without spending their wages. This means that both the output method and the income method, China's GDP is seriously underestimated, and the total consumption is seriously underestimated and the consumption rate is seriously distorted [xii].

Fifth, China's statistical system is not sound, a large number of grey economy is not included in the GDP, the tax system can not play the role of data verification. The statistical error is large, the planning is strong, the objectivity is weak. It is difficult to make economic analysis with the data of the bureau of statistics. China's economy is very complicated. It is said that there are red, orange, yellow, green, green, blue, purple, grey, black and white economy in various colors [xiii]. Statistics agencies are unable to compile comprehensive data, especially on grey incomes and the underground economy.

In general, the statistics of GDP and M2 in every country in the world have their own particularity, and should be treated differently in practical analysis and application [xiv]. To get an accurate picture of a country's GDP, a number of statistics are needed and then revised repeatedly.Tax growth is a good indicator in countries with strict tax systems,Because the correlation between GDP and tax revenue is very large. However, the correlation between taxes and GDP in China is weak, because the tax system in China is not well established. Other such as electricity consumption, transport volume can be used as a reference.

The GDP index of monetary policy reference should pay attention to the following aspects: first, the output method and the income method should verify each other. Second, national statistics and regional statistics to verify each other. Third, the GDP data and tax and other relevant indicators to verify. Fourth, the macro data should be verified with the micro [xv] data. Fifth, the government data and market data to verify each other.

The second question is how to solve the accurate and timely and sufficient GDP data? Research and explore the micro GDP data generation process of marketized big data, establish an economic analysis model with individual value function as a single variable, and use modern information technology to solve historical problems.

At present, what macroeconomic data needs to innovate is to establish a macroeconomic data industry. In the era of digital economy, modern information technology should be fully used to establish a scientific, dynamic, accurate and timely macroeconomic big data system, and this process should be turned into a process of creating value. The fourth plenary session of the 19th CPC central committee has made it clear that data is a means of production, participating in the national economic distribution. Macroeconomic analysis model can be built on this basis, to solve the scientific, accurate and timely economic big data, to achieve the scientific and timely monetary policy.

First, we build the big data of multivariate GDP, and design the four departments of households (individuals), enterprises, government and foreign countries. If Y=GDP, there are four value chain functions f (vf), f (vb), f (vg) and f (ve). Y is equal to f of vf plus f of vb plus f of vg plus f of ve. We distributed data rights among various sectors, and solved GDP separately using the income method and the expenditure method. On the income side we use labor income, profit income, tax revenue, foreign exchange net income to express, on the expenditure side we use consumption expenditure, investment expenditure, government expenditure and overseas expenditure to express. V is the value variable, and the value of each person is the fundamental variable of the value function. The total value of society is equal to the total value of all people and forms various value functions. Enterprise, government and abroad are a kind of value chain function. The value of people V is the total objective function. And V is equal to Y, and they can verify each other. So:

Y is equal to V is equal to f of vf plus f of vb plus f of vg plus f of ve.

Secondly, the big data model is decomposed into one variable to establish the market subject and transaction structure of big data. To manage and confirm the right of everyone's big data, make the relevant data become the assets of each subject, establish the balance sheet, and survive the statistical table. In order to make the model simple and practical, we take the individual as the only subject variable, so as to measure the value of each person and manage each person's income and expenditure, which makes it easier to solve the total GDP. In this way, as long as the model can solve the value of each person, the investment and consumption of each person in the spending side, and the labor income and capital income of each person in the income side, it can simplify the complex problem, realize the docking with digital currency, and unify with the monetary policy.

Y=V=f (V), V∈ (Vi), I = 1,2... N.

In addition to the difficulty of statistics and calculation, there is a great deal of uncertainty in solving and decomposing the value function of multi-departments and multi-units. But multivariable functions make us understand the conduction mechanism of univariate functions and the verification path.

The method of solving GDP with one variable simplifies the process of economic analysis and makes tax verification more feasible. On the overall research path, it is first determined that the total value of people is the social economic total, and the time integral of the value increment of people constitutes the GDP of a period (this figure automatically eliminates intermediate products and other noises). Secondly, this functional model is more explicit about the goals and tasks of social production. All the economic activities of human beings are ultimately for the service of human beings, to enhance the value of human beings. In the past, we took commodities and currency as the target variables of economic development, which led to the fetishism of money and even the misleading direction of social development, leading to the gap between the rich and the poor and moral crisis. Thirdly, the value of people is taken as a single variable function to solve GDP, which makes the value data of people become a real digital asset. Furthermore, digital currency is generated by combining with the block chain technology, which is not only a measure of value, but also a way to create value. Once this is achieved, money and monetary policy have achieved a real leap forward [xvi].

Third, the establishment of consumption and investment big data big data model and micro operation system

The important function of the market is to find value and information. Here, we establish the operation system of consumption supply chain and the operation system of investment value chain respectively. And to market the two systems separately.

The first step is to establish a functional relationship between GDP and human value and between consumption and investment:

Type, the total value of the Ⅴ representative, v representative of the independent variable, the total value is still a person's value. People's value is divided into people's value flow vI and people's value stock Vw. C for consumption, I for investment, rl for labor income, and rk for capital income. In this way, GDP represents the integral of the value of all people over a period of time, which is also equal to the integral of the investment and consumption functions calculated by the expenditure method, and the integral of the labor income and capital income functions calculated by the income method.

So, to solve for GDP, you have to solve for consumption and investment per person at the micro level. In terms of income method, we need to solve for labor income and capital income of each person.

Further research shows that the production function and economic growth function in western economics are also subject to this formula. Therefore, there is no contradiction between this proposition and traditional economics, and it is also unified with Marx's labor theory of value. If the value of everyone can be solved with block chain and big data, the "Marx problem" can be solved. [xvii]

Next, we will analyze the relationship between the production function in western economics and the economic growth theory of the suro model and the human value function. It is found that the theory of human's value function is consistent with the two theories, and the difference is the production theory and the growth theory of human's value function, which makes economic analysis change from multivariate to univariate. That is to say, the complicated economic movement actually has only one variable in the turnover, if we can solve this variable, economics will become scientific and concise. With the development of information technology, the scientific and technological revolution has solved this problem for us.

Formulas 3 and 4 prove the production function and economic growth function with the person's value as the single variable. First, the value of human beings replaces labor and capital, and takes labor as the value flow of human beings, and capital as the value stock of human beings. In fact, another important significance lies in optimizing the economic analysis model and improving the irrationality of the original function [xviii]. Second, the single variable production function and growth function. The production and growth theory solved by block chain and big data is more scientific and accurate, which has revolutionized the disadvantages of traditional economics [xix].

Second, we need to discover the micro mechanism of consumption function and investment function of univariate big data and blockchain model [xx].

An important symbol of the shift of the world economy from commodity economy to digital economy is the shift of traditional accounting management value model to block chain management value. Economy fission, share-holding system economy to pass system economy. Blockchain democratizes the economic system by giving everyone a distributed account to manage and account for their value.Stocks are a way of distributing dividends based on equity, but in the context of the digital economy, everyone's data has value and participates in the distributionWith the person's value voucher -- token, it is the person's value voucher, with the block chain accounting.This shift changed the distribution system of human beings, giving everyone the right to participate in the distribution. Everyone's big data is scientifically measured, essentially reflecting a person's ability to create value. It will make the civilization of human society advance a big step [xxi], fully discover the value of people, the value of better management, and the value of more people. Under such a system, everyone has a right to freedom based on his or her own value, and there is no more exploitation or inequality.

The Token Ⅴ = bIock (C) + block (I). Big data company B manages everyone's consumption data and investment data, and forms clear property rights through legal custody and right confirmation, which participate in the value distribution of big data company B. In this process, accurate consumption data and investment data are found through walras equilibrium and super account, and the accurate GDP is finally solved [xxii]. Randall knight's theory is still based on the theory of utility value and does not consider the revolutionary influence of modern information economics on value measurement and value model. The micro-marketization logic proposed in this paper is that the macro-economic model intervenes in the micro-market and creates value. The theory used is based on the human value theory of blockchain. What's interesting is that knight thinks that money creates value, and that the process of creating money is to expand production by solving the problem of information asymmetry. This paper also puts forward the view that money creates value, because money is the value itself, and the creation of money creates value [xxiii]. On this issue, the United States has the means to create global value and occupy the value of other people, and the world economy is facing the possibility of being once again occupied and monopolized by the United States.

Fourth, the establishment of income big data model and operation system, through the personal value management system, the study of people's stock value and flow value, and the calculation of their labor income and capital income, from the traditional economic production function and growth function, is logically unified and continuous.

Above, we discuss the micro-marketization mechanism of monetary policy from the perspective of expenditure (c, I). Next, we continue to discuss the micro-marketization generating mechanism of GDP from the perspective of income (labor income, capital income, data income) and establish a market-oriented operation paradigm.

According to the univariate model of production function, labor income, capital income and so on are merged into the value univariate function y=f (v). Set Ⅴ ∈ (V1, V2,... Ⅴ n), V = f (rI, fairly rk). So,

Suppose that everyone has time value, and everyone has a blockchain distributed account to manage their personal value, so that everyone can trade their future time use right and get income from the blockchain account. The time value of capital income as the past also can convert a time value, means of labor value and capital value involved in the production process can create new value, the value as a kind of access card (the value of the voucher) can trade, after entering the market, through the enterprise value chain and eventually form commodity value chain of national income that is GDP. Therefore, the pass-through economy will be very important, it is the most important target tool of the future market. Because of it and its market transactions, the data needed for monetary policy was discovered. More importantly, the process of data generation is a micro-marketization process that creates value, and the general evidence can be transformed into a monetary issuing mechanism, which is completely realized and discovered by the market movement. Money is the value of a person, the general evidence [xxiv].

The macroeconomic data measured by the expenditure method and the big data calculated by the income method can be verified mutually. This process is a market process, is dynamic. On this basis, the monetary policy framework has timeliness and continuity. Central Banks' deepening into specific processes of value discovery, management and creation is an important feature of the digital economy era. The emergence of the new functions of central bank and money depends on the continuous innovation of information technology resulting from the scientific and technological revolution.

For China, the application of this model will be very important, because it can rapidly improve the per capita value of Chinese people. If the per capita value of Chinese people is equal to that of the United States, China's GDP will be 3-4 times that of the United States. The more profound significance is that this is a kind of change, an epoch-making change [XXV].

Third, what is the direction of China's central bank and monetary policy? The first step is to take full employment as the most important objective of monetary policy, vigorously develop the private economy and small and medium-sized enterprises, and create the best business and monetary environment in the world for them. The second step is to gradually establish a dynamic, accurate, macro - and micro-coordinated market mechanism to realize the value creation function of money, so that the per capita value of China can catch up with that of the United States. The third step is to innovate the digital currency system based on the value of people, gradually realize the goal of maximizing the value of people, and establish a modern and scientific monetary governance system.

In 2020, China's economy and finance will face a more complex situation and huge uncertainties. Since the beginning of the year, a novel coronavirus has attacked the world, causing sharp fluctuations in the European and American stock markets. Moreover, the American stock market has broken up several times within a month, and the global economic development is facing a huge crisis. In response to the crisis, the United States has adopted extremely loose monetary policy, cut interest rates to zero, and launched a $5 trillion stimulus program and other policies.

We can consider the following special risks that China faces:

1. Ultra-loose monetary policy in the us could be a global risk. The dollar is the world's currency. Driven by the zero interest rate, a large amount of money issued by the United States is bound to spread to the world, and the United States will acquire cheap and high-quality assets. Global resources will quickly converge with the United States and its multinational companies. In this way, the material base of us dollar will be greatly increased in the short term and a new advantage of us dollar will be formed. In contrast, China has lost its competitive advantage, and even the monetary and financial sectors have been crushed by the us for a long time.If, at this point, the fed works with facebook to launch a digital currency based on the expanded dollar, with cross-border payments, the financial aggression will be fatal.

2. Combine the above with the possibility that the United States will intensify the financial and currency shock to China"Currency variant attack"China's globalisation is bound to stall and may even lose decades of outward-looking economic gains. The dollar and the us-controlled global financial system are economic disasters for any country. China must take precautions in terms of trade settlement, currency system and digital currency, and cannot take any chances.

3. China's domestic risks are still relatively large, with "three bluffs" [xxvi]. The Munich security conference [xxvii] has actually constituted a "division and encirclement strategy" of the international anti-china forces. As the financial opening to the outside world, the financial risk exposure increased. Economic and financial development is faced with many bottlenecks, such as system and structure, which has never been difficult.

Although China's economic and financial reform and development are facing great uncertainties, it also has many advantages, some of which are not available in any other country. Therefore, for China's monetary policy, we should always implement the central government's policies, adhere to the prudent monetary policy, promote the financial opening to the outside world in a scientific and prudent way, and build a solid financial and monetary firewall for the camp step by step. In view of the possible problems of "government failure" and "market failure", possible external shocks and "three cliffs", the following measures can be considered in the near future:

1, the"Full employment"[xxviii] was strengthened as the most important objective of monetary policy. The quantity and quality of full employment. Full employment is actually the maximization of people's value. Once full employment is achieved, several other monetary policy objectives can be basically achieved. We must not only increase the number of jobs, but also constantly improve the quality of employment.

Traditional monetary policy is often pegged to growth and inflation targets. But these two targets are increasingly likely to give the wrong signal. The reason is that under the influence of the scientific and technological revolution, the value function, production function and growth function have changed from the original linear state to the "invisible and multi-dimensional" geometric series, and it is obviously wrong to control the growth rate. In addition to the particularity of China's GDP statistics and the particularity of the M2 structure, it is easy to appear the "digital trap" of institutional structure, which leads to the problem of "government failure".

In fact, the goal of economic growth is to maximize the value of people [xxix], and full employment is the only goal of economic growth [XXX]. Once true full employment is achieved, other goals can be achieved. China has more than 1.4 billion people. As long as the value of China's 1.4 billion people increases, it will not be afraid of any external shocks. Therefore, China's monetary policy should create an optimal global monetary and financial environment for private enterprises and smes.

At present, China has a huge space for full employment and a serious problem of "insufficient development" in its economic development. In particular, we should pay attention to the change of human value function caused by the scientific and technological revolution. This problem requires in-depth theoretical and technical research in the monetary policy field. In the past, monetary policy was pegged to GDP, M2/GDP and other practices actually caused a huge "theoretical inertia trap loss [xxxi]". The problem has always been global. China's economic development and monetary policy must get out of this erroneous zone. China's economic development has a huge dividend, and even the scientific and technological revolution can bring China a bigger institutional dividend than that of the past 30 years [xxxii]. In real life, we also deeply realize that there is a huge space to achieve full employment, the actual value of each of us is far from the value of the due value, the fundamental task of social and economic system is to find the value of people, the value of managers, create the value of people, and realize the maximum value of people.

Therefore, if China's monetary policy is adjusted to achieve full employment with the standard of maximization of human value, the employment will be both quantitative and qualitative.

2. The second step is to gradually establish a dynamic, precise and coordinated market mechanism of macro and micro, so as to realize the value creation function of currency and make China's per capita value catch up with that of the United States.

Future central bank reforms willFrom the era of credit money to the era of value money.Since the time when the central bank was created, it has been charged with the task of creating money, but this process has always been accompanied by inflation, so the central bank has to create both inflation and disinflation. Our measure of a good central bank is that it creates more money without generating inflation. The process would show that the central bank created jobs, therefore created human value, or imported value abroad. Therefore, when the federal reserve creates a large amount of money, the dollar index still rises, which indicates that the central bank of the United States is a very successful central bank, because it successfully imports a huge amount of value for the United States, which is a "blood machine" for the whole world [xxxiii]. This exploitative nature of the American monetary system must be recognized and debunked. Because China is a relatively independent economy, especially the blood line of the market and finance is not very smooth, and the "blood-sucking mode" of the United States is not mature, so the United States still carries out economic sanctions and repression on China in all aspects.

So China's rise cannot depend on America and the existing world monetary order. Under the current monetary system, China's reform and opening up is fraught with risks. China must work hard to raise the value of its currency, domestically.

In practice, the micro mechanism and marketization mechanism of monetary policy should be established. On the one hand, the information system of the central bank, mainly the block chain and the big data system, should be established through the marketization mechanism. Make full use of digital assets under the digital economy mechanism, the value of discovery and managers, found big data and consumption big data management and investment, the two data as the property of the residents to participate in enterprise and national distribution, give full play to the discovery of market information and the value of the function, which can accurately measure full employment and GDP, implement big data accuracy, timeliness and effectiveness of monetary policy. The central bank can purchase services from domestic high-standard information technology companies and big data companies that meet the standards (such as ali, tencent, baidu, xiaomi, zhongke shuguang, gold chain, pingan yizhang tong, etc.). Enterprise, market-oriented, the construction of information system and operation system of the micro, will be highly sensitive for the central bank to create a "central brain [xxxiv]," the central brain can find value, management value, create value, the dynamic regulation of financial, really improve the efficiency of financial, to guard against all kinds of financial risk and financial crisis, especially can accurately measure the international, especially the United States the financial risk of the input.

More important is that the central bank's money-creation process turns into a value-creation process. By improving the value of every Chinese through monetary policy, continuously improving the quantity and quality of employment, and innovating the system and mechanism, the average value of Chinese people will catch up with that of the United States in about five years, so that China's GDP will be three to four times that of the United States [XXXV].

3,We will innovate the monetary system and vigorously develop digital currencies based on the value of people.Both in theory and in practice will make important contributions to China and even to mankind.

Neither the monetarist nor the Keynesian school has realized that "money can create value", and this creation process can be divided into two ways: connotative creation and epitaxial creation.

The monetary system studied along the direction of scientific value theory can create value, and the transmission mechanism of digital money is a market process of value creation. At present, the digital currency launched by various central Banks does not have such function, mainly because of the lack of correct and far-reaching cognition of the law of value, the law of money and the law of economic growth [xxxvi].

Human value management industry is probably the most profitable industry in the future, especially under the background of industrialization, marketization and internationalization of the renminbi, in the next five to 10 years in China on the basis of block chain technology industry "value", the industry is caused by technological revolution caused by the change of the value of the function, and through the digital economy and the economy, pushing China to the third civilization - science society, caused deep social change, this change will probably become a global benchmark.

The transmission mechanism of this monetary system has the following points:1) define the value of each person with the super account of the block chain, and generate the big data of each person's value, which is mutually reflected with the big data of each person's income function and the big data of expenditure function, and generate the pass evidence of each person through the market. The proof of human value is digital money.2) the consensus mechanism of blockchain is extended to the market to form the transaction process.Each person can buy his or her own time, or "time rights," on the market.This time right is also a blockchain pass with an additional personal and time stamp. 3) with"Blockchain + human value"The innovation of digital currency makes money become a tool to discover value, manage value, create value and realize value, integrates the value scale function of money and money, increases the value creation function of money, and fundamentally eliminates inflation and deflation. 4) implement strict and scientific access system and supervision system to prevent and resolve various possible risks and crises.

This kind of monetary system negates the existing credit monetary system based on the dollar from the mechanism, making the world free from the hegemony of the dollar and "blood drawing". It will play a key role in the rise of the Chinese nation and make an important contribution to the development of mankind.

The transmission mechanism of the new monetary system is highly compatible with China's existing monetary system, economic system and social system and can be transformed into each other. It is feasible in both theory and practice. More importantly, to realize the maximization of human value is to realize the freedom of wealth, spiritual freedom and life of human beings, and to realize the harmonious development of human beings, human beings and nature. It is a system with universal values and can resolve the ideological contradictions between China and western countries.

The year 2020 is destined to be an extraordinary year, but also a turning point year. The global outbreak of novel coronavirus earlier this year is still under way. It leaves a lot of reflection, most importantly on values. We must recognize the need to reform and open up the theory, system, market and society of the whole world and even China. We are looking forward to a new theory, an innovative monetary and economic system, a new system of governance and social system, a harmonious, healthy and safe global community values and fate, there is no longer the spread of the virus, there will be no economic and monetary plunder, no more "vampire hegemony", there will be no economic sanctions and trade barriers. We look forward to a "new world".

The following parts are the notes of the article:

[I] market failure, also known as market failure, is defined as moral hazard, adverse selection and free rider caused by information inadequacy and asymmetry, which invalidates market pricing and resource allocation functions. Government failure means that when the information level of the government is less than the information level of the market, the government's macroeconomic policies are ineffective.

[ii] the informationization makes the rapid increase of information and information entropy increase rapidly, if not better recognition and mining the information, the lack of scientific value function and the objective function in the system, will eventually sank in the information entropy, a huge system chaos, led to the deaths of economies, in reality a lot of people and businesses revels in it.

[iii] the great crash of 1929 was the change in the global economic pattern and the collapse of the gold standard, which changed the original value function. However, the hoover administration believed that the free market mechanism at that time would spontaneously solve these problems, which resulted in serious "market failure" and "government failure". In 2007, the global financial crisis was also caused by the rise of the "bric countries", which changed the original value function and production function of the United States. In addition, the "value function variation" resulted from the financial bubble, which led to the disruption of both the supply and demand chain of commodities and the financial chain, resulting in the global crisis.

[iv] the information wave and value revolution caused by the scientific and technological revolution are profoundly changing the world. The other is the new world we are looking forward to, that is, human beings follow the scientific and technological revolution, study and understand the new laws of economy, money and finance, and understand the new value function and law of value. The scientific and technological revolution has brought mankind into a third civilization -- a scientific society. The first civilization is a primitive society, the second is a class society, and the third is a scientific society. The scientific society is a whole new world, where science in English is the word Ology, which refers to a state of civilization and ecology, and not Sciense, which is mainly metaphysical positivism.

[v] GDP is the gross domestic product of a country, and GNP is the gross global product of its people. There are two ways to calculate GDP. One is the output method, which is the total domestic output minus the intermediate products. The income rule is the net income of the population for a given period. The traditional way of calculating it is that GDP=G+I+C+E (where G is government spending, I is investment, C is consumption, and E is net exports). The law of income is GDP=RL+Rc+RG.

[vi] assessing China's macroeconomic policies is difficult and complex. Focusing on a few important variables and rules in monetary policy may be more conducive to the in-depth discovery and solution of problems. On the face of it, we have arranged monetary policy in an orderly fashion according to common sense, which seems reasonable according to existing knowledge. Once we open up new value analysis and new information system, we will find new rules and value functions, so that we can find many problems and solutions that need to be considered. Methods and results are far from the new world. And China has its own problems, characteristics and laws that are different from any other country. The solution is to identify these problems and look for solutions.

[vii] traditional monetary policy data are mainly derived from the government's statistical system, but it is difficult for government statistics departments to obtain these data accurately in the case of government failure. Especially under the current statistical system in China, the statistical error is quite large, and it is easy to make mistakes in macro decision-making. Therefore, we transfer the work of data collection to market entities, and combine this behavior with market competition behavior, so as to make these data valuable, the market will find these information effectively, accurately and timely, so as to improve the effectiveness of monetary policy.

[viii] from my research experience, I can hardly adopt the research conclusions and methods of IMF. I attended a training course for senior managers of global central Banks at the IMF, and many of the research methods they used were not suitable for China's national conditions. For example, the life-cycle curve theory is a tool the IMF often USES to analyze investment and savings rate, but they ignored the traditional habits and special economic structure of each country. China takes the family as the basic cell of economy, while the life cycle theory takes the individual as the basic cell of economy as the developed countries like the United States. The life cycle curve formed by these two structures is very different, one is basically normal distribution, the other is linear upward. Savings rates in China and east Asia must be higher than in the west.

[ix] China's GDP has always been difficult to identify, not just because of the statistics, but because of the particularity of China, which I have long paid attention to. China's M2 / GDP is as high as 200% above, obviously with China's current financial depth, on the one hand, molecular M2 is likely to be the problem of financial structure overestimate how many, the main reason is that originated in the planned economy of the financial system, the direct financing system and monetary capital oriented market development is insufficient, lead to China's financial structure is given priority to with direct financing, making a lot of money to focus on the banking system, appear even idling. On the other hand, GDP is undervalued for a variety of reasons. The disappearance of a large number of micro-economic entities in recent years has alleviated this problem to some extent, and greatly reduced the size and momentum of the Chinese economy. Tens of thousands of small and micro enterprises in China are like "ants under the boots of stendag". They survive and die by themselves. The deterioration of the micro environment makes many of these enterprises on the road of no return, which may be the biggest loss invisible to the Chinese economy. They are the soil of China's economic development. .

[x] the public ownership of means of production has a great impact on asset prices, which extends to the global model and affects its global pricing. We seldom see real estate enterprises from western countries purchasing land and developing in China. Foreign residents are also less willing to buy homes in China. Moreover, China's investment figures are different from those of western countries. Because the investment is only a right to use the assets. Similarly, the capital market is also difficult to price. The net assets of listed companies are only a kind of right to use, which is more related to the way of use and the years.

[xi] public goods refer to the public facilities of the government, which provide services and consumption to residents free of charge. In the developed capitalist countries, this part belongs to budget payment and transfer payment. But in China, a large number of state-owned enterprises are also involved in the production of public goods or "quasi-public goods".

[xii] up to now, the housing system of civil servants of state organs in China is still divided. It is said that the official canteen of xinhua news agency is very good, so that the food per meal exceeds the level of the middle and upper families in Britain. So every year, millions of students in China apply for the civil service, because there is so much difference between the system and the system. Many phenomena have formed the "aristocracy of the civil service", and the official assistance, the official officials to each other, so that many families enjoy long-term or even generations of government dividends.

[xiii] let me give you some examples. When I am in Beijing, I often take taxis. Through communication with drivers and my own investigation, it is found that there are about 70,000 regular taxis in Beijing, while there are estimated to be 150,000 irregular taxis in Beijing. The ratio of white to gray is 1:2. If the annual income of each black car is 50,000 yuan, the annual revenue should be around 8 billion yuan, and this does not include the modified tricycles and so on. Beijing's bicycle baked sweet potato, estimated to have ten thousand scale; Beijing buys up tens of thousands of scrap; The sale of small property right house and rent is the scale is astonishing, several is said to have 6 billion square metre, equal to 10 years estate develops gross. Recently, I went to changsha for three days. I took a black taxi three times out of six. I chatted with the drivers and they said that there were 6,000 or 7,000 regular taxis in changsha, while there were 10,000 black taxis. There are 7 black cars in juzizhou head.

[xiv] in the United States, the department of commerce is responsible for the analysis and statistics of gross domestic product. The first revision & The final revision, mainly published in the third week of each month. GDP is usually compared with the same period last year. An increase in GDP indicates a faster economy and a stronger currency. A decrease indicates a slowdown in the economy, and there is downward pressure on the currency. In the case of the United States, GDP growth of 3% is the ideal level, indicating a healthy economy. Growth of less than 1.5% indicates a slowdown and signs of a recession. In addition, the GNP of the United States is very large, the United States has a large number of multinational companies in the global production, if the evaluation of the United States economy using the GDP indicator is obviously not enough.

[xv] microfundamentals of monetary policy is a book published by fudan university press in 2010. The author is Chen xuebin. "Monetary policy micro basis: the Chinese residents' consumption and investment behavior dynamic simulation research is about the research of" dynamic behavior of the residents' consumption and investment in China "book, the book includes: dynamic behavior of the residents' personal life cycle consumption and investment optimization simulation, consumption and investment decisions of time preference and risk preference theory research, based on time-varying time preference of consumption and investment simulation, etc.

[xvi] traditional economics takes the commodity value or price variable as the principal variable of the value function, which violates the value intention. Value is a kind of usefulness to people, value is also created by people. The value function is a continuous function, which changes the three breakpoints of the previous value function: the breakpoint of supply and demand, the breakpoint of market and society, the breakpoint of man and nature. The greatest significance of the scientific and technological revolution and the information revolution lies in the value revolution. In particular, the block chain technology and the big data technology enable everyone to discover, manage and innovate the value, and integrate the currency with its fundamental function-value scale, thus eliminating the possibility of inflation and deflation. Money can create value, the key is what currency. This is probably the most important function and meaning of the new digital currency.

[xvii] there are two important problems in Marx's labor theory of value. The first is that Marx also starts from commodities to solve value, and thinks that labor is a function of commodities. Second, due to the limitations of time technology, Marx could not solve simple labor and complex labor, and adopted the average method, which ignored the importance of human value difference and fell into equalitarianism. This was also one of the important problems that many socialist countries faced later.

[xviii] in the original production function p=f (I, k), the separation of labor and capital hides the correlation between the two variables. In western economic treatment methods, the logarithmic exponential method is also adopted to change k into I, which increases the difficulty and uncertainty of economic analysis. If calculated in terms of a single variable of people's value, this problem can be avoided and the production function and growth function can be unified. More in-depth research also found that people the value of the function model of the revolutionary significance is that it no longer USES the utility theory of value of microeconomics walrasian equilibrium research, but in the walrasian model on the basis of the import block chain and big data, and thus solve the walrasian equilibrium and the phillips curve, the study more interesting.

[xix] the important drawback of traditional economics is that it is not scientific, mainly because its basic theory -- utility axiology is subjective, and people's feelings cannot be measured. This theory has introduced the research of human economics into the "centennial error". This problem exists in many current theories, which need serious reflection. Both Adam Smith and Marx, and they as theorists at the time of the historical background is a great valuable, however, any kind of theory is only a small part of the human society at some point, they are not enough to become a dogma and metaphysical basis, these two theories are influenced the Chinese and western culture with the model, they should be by continual development and change.

[xx] this part I do the research "the gold chain" model, namely consumer global supply chains and investment value chain model, this model is a micro, marketability, based on personal consumption and investment data of market-based pricing and asset management, make the data of production, transfer the market value of discovery mechanism and incentive mechanism, to solve the macroeconomic data. In China, the central government or state-owned enterprises should step in, or the government (the people's bank of China) should let the large domestic technology enterprises step in through service outsourcing. Smes step in as market makers.

[xxi] we call this civilization a "scientific society" because its operating logic is scientific and the value calculated with highly developed information technology, block chain technology, big data technology and artificial intelligence technology. Historically speaking, mankind will enter a "third civilization "- a scientific society. The first civilization is a primitive society, by the distribution of people's physical strength, the second civilization is a class society, by the distribution of the means of production occupied by people, the third civilization is a scientific society, by science and technology + market calculation of the distribution of people's value, this value can be (block chain + people's value) : general evidence.

[xxii] Randall Wright, one of the most influential scholars in contemporary monetarism. He is a senior professor at the Wisconsin school of business, an adviser to the federal reserve Banks of Minneapolis and Chicago, and a research fellow at the national bureau of economic research. The main research directions are monetary theory, macroeconomics and labor economics, which are very pioneering in the field of monetarism. Randall. Study of knight: microscopic basic assumption is that monetary policy commodity production and exchange based on not friction-free walrasian markets, but the moment there is a dual matching does not meet the "demand", namely in the case of face-to-face transactions, individual consumer preferences and social division of labor determines the vast majority of cases both parties cannot barter, we call it "search frictions". In such a market, where transactions are obviously difficult, there needs to be some sort of accepted medium of exchange to make them easier to reach: money. In the case of currency, even if your counterparty doesn't like the goods in your hand, you can still exchange the money for the goods in his hand, because he expects that he can also exchange the money for the goods he wants. According to game theory, this constitutes a monetary equilibrium in which, in most cases, the two sides abandon the transaction, as opposed to no monetary equilibrium. A balanced currency makes everyone happier because transactions are easier. At this time, legal tender is endogenous to achieve positive value.

(xxiii) which we should pay attention to a major change in the U.S. monetary policy in 2020, Powell, chairman of the federal reserve announced on March 16, 2020, in response to the global COVID - 19 viruses and collapse has launched a $5 trillion and a zero interest rate monetary policy, under the condition of open economy, these currencies, in fact, according to the viewpoint of this article will extract the "blood" of the people all over the world, and create great value for us, this is because the dollar is the world's currencies, under the new value theory, it will takes up the value of global each country people freely.

[xxiv] there are a variety of interpretations of pass-through. The general certificate defined in this paper refers to a person's certificate of value. For the economy has attracted the attention of the world, Germany, the United Kingdom have issued national economic strategy. After the launch of bitcoin, ethereum and other technical certificates, the United States is studying to launch a digital currency to replace the dollar through facebook. In combination with the extremely loose monetary policy of the United States at present, Libra is likely to be used as a platform to create human value certificates, create digital dollars and rule the world currency for another 100 years. In this model, more factors are in China's favor because there are more Chinese. Therefore, the future international competition is the competition of human value and the competition of currency based on it. From this thought, the design of digital currency in China must be combined with the value of people.

[XXV] if shang Yang's reform enabled the state of qin to move from a slave society to a feudal society, the productive forces would grow rapidly and eventually unify China. Therefore, the reform described in this paper will make China transition from a class society to a scientific society and make a great contribution to the community of Shared future for mankind.

[xxvi] the three bluffs mainly refer to the huge gap between finance and the real economy, the value and price of RMB, and the real income of the people.

[xxvii] the Munich conference, while discussing the absence of the west, actually attempted to build a policy of encirclement of China. Some European countries are also discussing how to reshape the west. For example, Sweden's foreign trade minister helberg invited the trade ministers of Denmark, Germany, Finland, the Netherlands and the Czech republic to a meeting in Stockholm on February 18. The meeting comes as France, Italy and even Germany push for a new European commission to implement tougher trade defences and looser subsidies, and nurture more heavyweight European champions to confront China. The measures reflect a rise in protectionism that has hit liberal European countries hard. The Swedish initiative is intended to reawaken liberal forces in Europe.

[xxviii] China's monetary policy consists of four objectives: economic development, full employment, price stability and balance of payments. These four goals are interdependent and mutually restrictive.

[xxix] the central question in economics is to study the value of people or the value of goods. This is an important question. Value is a kind of usefulness to people, economics is the study of value, so economics is the study of people's value and price. Once the value or price of a person is solved, the price of a commodity can be calculated. The key is to solve this problem, the production function and the growth function in economics can be solved. In the analysis of commodities, Marx also divided the value of commodities into use value and value, in fact, people should study the use value. The information revolution caused by the scientific and technological revolution is a major contribution to human being's value can be accurately measured and managed! The change of this value function will have a profound impact on the economic theory, financial theory, monetary theory, and even the history and historical research of human society!

[XXX] the objective function of the economic growth function is the value of people, not the value of goods. The significance of this transformation lies in the continuity of economic analysis, that is, the production of goods is to improve the value of people, and the value is also created by people. The novel coronavirus in 2020 has an important significance for human beings to realize the transformation of this growth target and value function, which is of epoch-making significance. In the new value function, currency and human value are integrated without inflation and deflation. Moreover, once human value and monetary value measure function are integrated, full employment will enhance international competitiveness and achieve international balance of payments.

[xxxi] many tragedies in human society are caused by people being trapped in a "cage of fixed thinking" without knowing it or even knowing it for generations.

[xxxii] according to my research, there are six major dividends in China's economic development: system dividend, labor dividend, science and technology dividend, resource dividend, internationalization dividend and ecological dividend.

Would [xxxiii] at the beginning of the year 2020 will be coronavirus caused a plunging stock market in the United States, the federal reserve as an excuse to offering out of the super loose monetary policy is the wealth of the world's reshuffle, need has drawn great attention of the world, the United States can take advantage of this opportunity, exert the dollar world currency function, under the guidance of zero global asset acquisition, this to other countries outside the United States will be disastrous. This may explain why the laggards of South America, Africa, the Middle East and so on are getting poorer (and now the former Soviet union is getting caught up in this trap), because the United States USES market and currency mechanisms to capture their value for free. In fact, the whole world is producing for the United States, but the current President of the United States is not satisfied that the United States does not exploit enough, or do everything possible to suppress these countries (like slave owners do to slaves). .

[xxxiv] now we "central brain" a lot of cells is transplanted, especially in theory, subject to the United States, basically is not even on the central nervous is numb, for example, we have been trying to solve the financing difficulties of small and medium-sized enterprises financing your problem has not solved, because the system is the nerve center in macro and micro, and is the numbness of partition between government and market.

[XXXV] the information revolution has actually rapidly improved the learning speed and labor efficiency of the Chinese people, and the scientific and technological revolution can promote a profound "value revolution" in China, so that the average labor productivity of the Chinese people will rise rapidly, catching up with or surpassing the United States within five years. The Chinese nation is a hard-working and intelligent people, so it is possible to achieve this goal. Therefore, China's economic development should not set a GDP ceiling target, or even not assess GDP, but must set a target of full employment and per capita value.

[xxxvi] for the DECEP to be launched in China, its function is still a kind of credit currency, and it can only replace some cash. It is just a digital legal credit currency and cannot create value. This design is insufficient in the aspects of monetary theory and value theory and needs to be improved.

Source link:http://news.stcn.com/2020/0322/15749698.shtml