A Study On Coordinated Development Of The Virtual Economy And Real Economy

Since the1970’s, transnational transfer of the real industries and globalization of the virtual economy shaped the international economic situation profoundly, which achieved global range allocation of production factors and meanwhile, caused a worldwide economic imbalances, especially the imbalances between virtual economy and real economy in the developed countries and emerging countries. For developed economies, after continuing "de-industrialization" process, the domestic traditional industries such as steel, automobile, chemical, transfered to developing countries. The increasingly shrinking real economy played a less important role in economic growth and employment absorption. In the meantime, as major international reserve currencies, these countries’ sovereign currencies have natural advantages in settlement and risk aversion. Therefore, when the real economy is shrinking, the virtual sectors such as finance and real estate are growing rapidly in the financial liberalization tide. The scale of virtual economy surpassed the real economy gradually and produced an increasingly important impact on the economy. In the process of undertaking traditional industries, the emerging economies become deeply embedded in the international division, which promotes the rapid growth of the real economy. However, due to the lagging domestic financial market and financial organizations, Function of the virtual economy is greatly restricted in service for the real economy——whether providing financial support or resolving market risk. Virtual economy’s excessive expansion and lagging behind the development of virtual economy is the performance of the virtual economy and real economic development imbalances in the developed economies and the emerging economies, which is the important reason for the outbreak of crises in recent years. Therefore, investigating and analyzing the coordinated development between the virtual and the real economy systematically in order to resolve the imbalances and stabilize global economic growth is the main purpose of this paper.Virtual economy and real economy are two different mode of economic operation, the former is a pricing system based on cost, while the latter is a pricing system based on capitalization. Though the two modes are interrelated and interactive, they have their own independent characteristics. This paper inspects the coordinate relationship between virtual economy and real economy from their different operating characteristics. First, this paper defines the basic meaning and features of the coordination between virtual economy and real economy, then, inspects the development process of virtual economy and real economy under the perspective of their interaction. On this basis, this paper summarizes the basic law of their development processes, that is:virtual economy, which relies on the real economy, is the product of real economy’s development to a certain stage; moderate size of virtual economy will have a positive role in promoting real economy growth; virtual economy exhibits more and more independent operating characteristics; different structures of the virtual assets will have a great impact on their coordination. In order to analyze their interrelationship deeply, this paper build a collaborative growth model of virtual economy and real economy in the neo-classical framework, based on which this paper discussed the coordination mechanism between virtual economy and real economy further. Through examining the coordination mechanism between virtual economy and real economy, it is found that their coordinated development depends not only on the total size, but also on their internal structure, especially on the internal structure of virtual economy. With coupling coordination degree model, taking the United States and China as samples, this paper estimates the degree of coordination between virtual economy and real economy. Furthermore, this paper compared the coupling coordination degree with the total ratio of virtual economy and real economy, it is found that the coupling coordination degree and the total ratio show a negative correlation in the United States, The faster the virtual economy expands, the lower the coupling coordination degree is; by comparison, the virtual economy in China is lagging, the coupling coordination degree and the total ratio don’t exist a negative correlation, in certain period it is even showed a positive correlation. Moderate total size of virtual economy and real economy is an important aspect of maintaining their coordination.In addition to moderate total size of virtual economy and real economy, the internal structure of the virtual economy is another important factor affecting their coordinated development. Different structure of virtual economy depends on different. On the basis of existing studies, this article put model of virtual economy development into two categories:bank and government-oriented mode and market-oriented mode. They have different characteristics in information processing and risk diversification, which will impact on the real economic growth and stability, finally, impact on their coordination. Through comparative analysis, it is found that bank and government-oriented virtual economic development mode is suitable for a country (or region) which is in the early stages of economic development, or in the stage of ripe industry expansion; the market-oriented economic development mode is suitable for new technology or emerging industries supporting. Bank and government-oriented virtual economy development mode has the advantage of smooth intertemporal risk; and the market-oriented economic development mode has the advantage of diversifying cross-sectional risk. In order to confirm the above point of view, this paper examines the economy and real economy development in typical nations.To further analyze the factors affecting the coordination of virtual economy and real economy, taking the United States and China as sample nations, this paper built an autoregressive distributed lag model (ARDL-ECM) to examine the influence of the short-term interest rates, credit scale, real estate market, stock market on the real economy output and general price level. The result shows that hort-term interest rate has a significant impact on both real economy output and general price level; in contrast, the size of bank credit in China play a more important role in affecting real economy output and general price level.In the final part, this paper summarized the conclusions of the study, meanwhile, presented several recommendations on China’s virtual economy and real economy coordinated development from perspective of the total size, internal structure and supervision.