In the perspective of utilization of electronic money which is incorporated into the monetary multiplier theory of decision analytical frameworks, the authors use methods of co-integration and error correction model to study the money multiplier of electronic money based on the data of China from 1990 to 2011. There are some conclusions: Firstly, in long-term, improving the usage of electronic money increases money multiplier by reducing cash leakage rate on the one hand, and reduces the money multiplier by raising the deposit reserve rate on the other hand. But the role of latter is stronger, the usage of electronic money has enhanced endogenous and instability of monetary multiplier. So it has reduced the effectiveness of monetary policy.
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