The Relationship Between Financial Innovation And Economic Growth Based On System And Dynamic Method

This dissertation is based on the development economics, innovation economics, finance and system theory; and the study of the relevance of financial innovation and economic growth concerns the complexity, feedback, time delay and nonlinear phenomena, then confirmed that related variables between financial innovation and economic growth and builds the system dynamic model and simulates. Finally, through combinating the characteristics of relevance of the financial innovation and economic growth, it builds the decision-making model in positive interaction of the financial innovation and economic growth. This dissertation can be divided into five parts:1. System and dynamic view of the theories about relationship between financial innovation and economic growth, including theories about the relationship between financial innovation and economic growth and the relationship between innovation and economic growth, and the theory of complex systems. This study is in order to construct the theoretical basis of the relevance of the financial innovation and economic growth.2. Analysis on financial innovation system, economic growth system and the complexity analysis of the relationship between the financial innovation and economic growth. Firstly, it describes complex system characteristics of the financial innovation and economic growth based on the system concept and the complex systems theory, focusing on describing the complex characteristics of the system structure, operating mechanism, function and effect. Secondly, it analyses the complex nature of the relevance between financial innovation and economic growth, associated with the integrated use of complex system theory, system dynamics method and combined with research results related to financial innovation and economic growth. And it is characterized through complex system on relationship between financial innovation and economic growth for building the theoretical foundation of this dissertation.3. It is the variable selection and inspection about the relevance the financial innovation and economic growth systems, including determining order parameters selection of the financial innovation system, economic growth system, and the relationship between financial innovation system and economic growth system, and the empirical test of the variables of the relevance of them. There are two purposes of the empirical test, the one is to prove the relations between the two systems, and another is to provide the relevant reference parameters for the system dynamics equations next.4. It is the system dynamics model and simulation about the relationship of financial innovation and economic growth. Following the main features and steps of the system dynamics modeling and simulation, it builds correlation of system dynamics model of the financial innovation and economic growth to reveal the relationship between the two dynamic complexity systems. According to the financial innovation and economic growth mechanism analysis in Part 2 and the determination of the variables of financial system and economic growth associated with in Part 3, through the System Dynamic modeling and simulation software:Vensim PLE 5.7a, then by using the related and real data, it simulates and gets the results of the evolution analysis and some implications.5. It is the decision-making model of positive interaction between the financial innovation and economic growth. The complexity mechanism of financial innovation and economic growth decides decision-making model of positive interaction between of financial innovation and economic growth would have those characteristics:urgent, dynamic target, joint process, adaptable and gradable subject. Thus, the decision-making model is designed to obey the corresponding principles and functions of the decision-making model and it need to pay attention to the subject and the target position and to build and maintain the protection mechanism when running the decision-making models. This part is the result of the dissertation to provide meaningful information and recommendations for the relevant policy-making authority.