Virtual Economy In The Context Of The Economic Growth Causes And Mechanisms

Factors of economic growth, inner mechanisms and their realization ways has been long maintained the core of economic theory study and research which is so enchanting which have attracted numerable economists working hard in it.Since Adam Smith published his famous An Inquiry into the Nature and the Causes of the Wealth of Nations, and followed the development and perfection by other economists like Harrod-Domar, Robert Merton Solow, David Ricardo, Thomas Robert Malthus, N.Kaldor, etc., the economic growth theories have become abundant and fruitful. As paralleled their time of economic development phase, economists had been generally concerned about the Real Economy which focusing on elaborating with complicated models the relations between the growth of national income and the concrete economic variables, such as accumulation of capital, growth of labor force and advancement of technology. However the reality of the contemporary era is: accompanied by the fast growth of economy, the Fictitious Economy which characterized by bond and stock, and so on, is undergoing a dramatic expansion and a constant adjustment of its structure. Especially when time entered in 70s of last century, Fictitious Economy had faced a growth with an acceleration speed. Economic virtualization became a significant role in economic development.Thus we come across a series of question: on the background of economic virtualization, what is the main driving force of economic growth? Are the theories which produced under the situation when real economy played as a main role still suitable to the new economic age? If not, how to construct the new economic growth model? The study subject of this paper is the causes and the mechanism of the economic growth on the background of economic virtualization. The author wishes to build up a new growth model in such background through his studies and researches, and also he wish can bring forward some advices or policies under our harmonious economy and society construction background. The paper firstly tries to trace and depict the history of the economic growth theories, discusses sorts of theories of their study cores, economic meanings and existed weaknesses or limitations. The paper also passes criticisms on traditional economic growth theories, points out the possible direction of economic and financial system when concerns bout the participation of human factors. Secondly, in terms of the definition of Fictitious Economy, the paper reviews its basic connotation and the development and takes the emphasis on analyzing the complexity of the economy growth on the background of economic virtualization.Therefore, the author imports the concept of Expectation into the paper, trying to make a humanized explanation to economic growth. And the paper expounds the relations between the Expectation and the economic growth from the connotation and recognition process of Expectation, the international experience of expectation and economic growth on which basis also presents the unique Expectation theory and the theory of Expectation Bestir the Country. Under the supporting of these theories stressed above, the author raises the definition of Fictitious Fortune based on the Expectations, Investment and Economic Model, then delivers the demonstration. And finally, from the practical point of view, the paper put forward some logical advices to the market economy of our country.Under the economic virtualization background, the function of economy becomes more complicated. Virtual (or fictitious) economy is a double-edged sword. On one side, a well fictitious economy circulation can enhance the savings for Real Economy, can provide financing support, can decentralize management risks, can reduce trade costs, can transfer the information of Real Economy, can optimize the resource allocation, and also can driving the Real Economy growth through stimulating the consumption and investment from the so called Fortune Effect. On the other side, the development of Fictitious Economy may form some negative influences on Real Economy such as cutting down the capital flow into Real Economy, reducing the effective utilization ratio, coming forth economic bubble, increasing instability and speculation risks. Therefore, to establish an Expectation- oriented macro policy system on the bases of studies on human behavior factors, to control and to lead the Fictitious Economy to a positive way are very meaningful to the whole national economic development. The author hopes this paper can benefit the economy of our country in certain aspects.