Abstract: This paper puts forward theoretical hypotheses that M2/GDP is mainly related to financial structure, economic efficiency, price level, tax burden, savings rate and other factors, and uses the transnational panel data of 41 countries as a sample to conduct an empirical study on factors that influence M2/GDP. Our results show that the improvement of economic efficiency can refrain the rapid rise of M2/GDP, while the financial structure dominated by indirect financing, tax burden and price level are significantly positively correlated with M2 / GDP. Financial development and M2/GDP are not substitutable. This study is of great significance to deeply understand the influencing factors of M2/GDP, improve economic efficiency, optimize the financial structure, vigorously reduce taxes and fees, and better promote high-quality economic development.
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