Reach Of The Financial Development ﹠ Rural Economic Growth

The theory of financial development and economic growth mainly studies the interrelationship between financial development and economic growth as well as their internal acting mechanics, expounds the long-term influence of the fluctuation of financial variables and the reform of financial institution on economic development, and explores the financial development policy adopted by developing countries to promote economic development. "Financial restraint" and "financial deepening" are the theory's core concepts. As the largest developing country in the world, China's rural economy holds a relatively large proportion of national economy. Advancing rural economic growth by effectively utilizing financial approaches, however, historically or presently, has not acquired expected results. Current rural financial restraint is partly owing to historical inertia, partly caused by current rural economic and financial system and duality of urban and rural economic structures, which in turn becomes the barrier to rural economic growth. To make a general survey of the existing research on rural economic growth, it is found that the solutions to rural economy sustainable development problem are usually sought from the perspectives of institutional reform, technical advancement, the change of market and foreign trade environment, meanwhile, it is rare to see a systematical and penetrating study on financial development's promoting effect on rural economic growth from the angle of capital formation, especially rural financial supply. Finance is the core of modern economy, so it is not only theoretically feasible, but also of great practical significance that we use the theory of interrelationship between financial development and economic growth to analyze the issues of rural financial restraint and deepening of China, and present suggestions on financial policy and its implementing strategy.The logic of this dissertation is as follows: first is the retrospect and summary of the classic financial development and economic growth theory, second comes the deep-going analysis of relationship between rural financial development and economic growth, the cause and manifestations of financial restraint and its hindrance to rural economic growth, thereafter goes the discussion of the road of removing rural financial restraint and practicing restrained rural financial deepening in order to meet the transformation demand of rural economic growth strategy in compliance with China's entry into WTO and the context of opening finance, lastly, a number of implementing strategies are put forward based on restrained rural financial deepening. According to this logic this dissertation consists of nine chapters:Chapter One is the comments on theories of financial development and economic growth, or literature review. Emphasis is put on the economic growth theories and mode of Harrod-Domar, P.M.Romer, R.E.Lucas. And the financial theories of J.G.Gurley and E.S.Shaw, the financial structure theories of R.W.Goldsmith, the theories of Financial Repression and Financial Deepening, the theories of T.Patrick' Supply Leading and Demand Following, the financial strain theories of Hellmann, Murdock and stiglitz.Chapter Two is the analysis of financialization level of rural economy and the relationship between rural economy and finance. Related index/criteria are selected to analyze the financialization level of China's economy, quantitative analyses conducted on financialization level of rural economy, comparisons are made between rural financial relativity ratio and national economy and urban economic financialization level, finally demonstration analysis is made on the relativity of rural financial development and rural economic growth. Chapter Three is the cause and manifestation of rural financial restraint and its hindrance to rural economic growth. It mainly studies the relationship between rural dual economic structure and rural financial restraint, and the latter's macro financial systemic foundation, main demonstr...