The Nexus between Government Revenue, Money supply and Gross Domestic Product in China

The objective of this empirical study is to find out the long and short run relationships between government revenues, money supply and Gross Domestic Product. The study used Time Sires data with secondary data collected from China's national office of statistics within the period (1990-2018) and employed the ARDL model based on the literature review. We used the Gross Domestic Product as a dependent variable and the money supply (M2) and Government revenue (Re) as independent variables. The study results shows the independent variable to have positive signification on the Gross Domestic Product. The study recommends that the Chinese government needs to stay at the same level of money supply and use a good monetary policy to control the money supply value because it has a direct relationship. The government revenues play linkage role between the growing economy and the money supply.