A Study On Fictitious Economy And The Impacts On Real Economy

The modern economic system is made up of fictitious economy and real economy. Real economy is an economic activity which is made from material production, sales and direct provision of services for these. Fictitious economy is a relative concept to the real economy. In the domestic academic circle, fictitious economy is defined as a input-output process which makes a price by psychological expectancy, trades based on fictitious capital, and is divorced from real economy. It is an economic activity whose revenue source is short-term market price fluctuations. The domestic scholars' researches on fictitious economy are mostly based on the concept of fictitious capital which is elaborated in the third volume of Karl Marx's Capital. Seen in this light, fictitious economy should be designated by the name of fictitious economy. The depth development of economic globalization and the rapid development of financial derivatives transactions have made the scale of the global fictitious economy expands rapidly. It has brought the global economy an unprecedented economic development model which accumulates wealth mostly based on fictitious capital. The rapid development of the global fictitious economy has promoted the growth of the real economy, at the same time, and accumulated a lot of economic bubbles that has led to frequent bursts of every kind of financial crisis and economic crisis.System of National Accounts is the core of the modern economic statistics, is the main data and information sources of macro-economic analysis and decision-making. The thesis is based on the principle of fictitious capital of the Marxist ideology and the current related theoretical results. From the perspective of national accounts, the thesis researches and define the specific area and output of fictitious economic activity, quotes the concepts and definitions in the national accounting theory to reveal the essential characteristic of the fictitious economy, and the influences, the transmission mechanism that from fictitious economy to real economy. According to the macro-economic analysis and decision-making needs on the management of fictitious economy, and combined with the operational features of the fictitious economy, the thesis has designed and proposed the principles of fictitious economic accounting, structured the fictitious economic accounting index system and account system. It hopes that it can offer some useful complements to the limitations of the current fictitious economic accounts in the national accounting system. From the perspective of the modern institutional economics theory and financial innovation, and combined with the objective facts of the fictitious economic development, the thesis has explored and analyzed the nature of the development of fictitious economy and the transmission mechanism of the influences of fictitious economy on real economy. Based on these, and according to the relevant economic theories, it can build an econometrics model. The thesis has used the Eviews5.0 to do the empirical research on the transmission mechanism of the influences of fictitious economy on real economy, revealed the general law and the intrinsic conduction mechanism of the influences of fictitious economy on real economy. It has provided some effective theoretical basis for Macroeconomic analysis and policy formulation. Based on the empirical research on the transmission mechanism of the influences of fictitious economy on real economy, and combined with modern economic theories and thoughts such as development economics and game theory, the thesis has provided some related theoretical perspectives and policy recommendations for China's Choice of the way of the fictitious economic development. The thesis mainly includes the following areas:Firstly, the scope and nature of the fictitious economyThe thesis has quoted the concepts of capital, assert, market transaction, direct output and indirect output, to define the specific areas and the essential characteristics of the fictitious economy beginning with the fictitious economic carries--fictitious asset and fictitious economic transaction. The fictitious asset can be divided into the following main three categories:financial derivatives, stocks and other marketable debt securities, investment real estate. The specific areas of the fictitious economic transactions include the following main categories:financial derivatives transactions, the secondary market transactions of stocks and other marketable debt securities, the secondary market transactions of the real estate.Fictitious economy is completely detached from the real economy of the specific input-output process. The nature of fictitious economic activities is that it is a transfer process of the symbols of right value, but the actual volume and value of the physical assets which are represented by the symbols of right value, have not occurred any substantial changes and have not created any new kind of substantial wealth in the transfer of the symbols of right value. On the whole, fictitious economic activities have the characters with Zero-sum Game. Though there is spread income in the transfer process, on the whole, it is just monetary redistribution among the traders, it is a distribution transfer.Secondly, the direct and the indirect output of fictitious economy The direct output of fictitious economy (GDP) includes government revenue generated directly by fictitious economic activities, the finder's fee from the trading intermediaries, the profits that the institutional sectors earn in fictitious economic transactions. The improvement or deterioration of the financing environment for the real economy, resource allocation, and the optimization or deterioration of the industrial structure are just the follow-up impact of fictitious economic activities, they are belong to the indirect output of fictitious economy. Fictitious economy will cause the phenomenon of inflated national output (GDP):National output is increasing, but the national substantial wealth or social welfare has not increased, the rate of increase of national wealth is lower than the rate of increase in national output.Thirdly, the influences and evolution of fictitious economyFrom the view of the institutional evolution, fictitious economy was generated when there was difficulty in to increase income and efficiency. It is a new economic regulation that was evolved when Capital appreciation in the field of traditional industry got into trouble, the capital main body wanted to decrease the cost and chase excess profits.From another view, the evolutionary process of fictitious economy is also a developing process of the financial innovation. The process of asset securitization is a virtualization process of economy.Fourthly, the conduction mechanism of fictitious economy impacting on real economyThe change in the market liquidity of fictitious economy is a decisive factor of the stability of fictitious economy. When there is an appropriate liquidity in fictitious economic system, all kind of fictitious assets can change to money capital. It can guide the social resources flow into more efficient input-output areas of the economy and industry, improve the efficiency of the allocation of social resources as a whole, and thus realize the initial function of fictitious economy.When the fictitious economy with excess liquidity, it will cause the fictitious asset market prices rise irrationally and create a large number of asset price bubbles. The rise of fictitious asset stimulating the prices of capital goods and consumer goods in real economy by price-demonstrating effect, and it will lead to inflation. Once the fictitious asset price bubble burst, the financial institutions which hold a large number of fictitious assets can not liquidate the fictitious assets, will loss mobility required for normal operation and declare bankrupted. If the bankruptcies of financial institutions trigger a domino effect, the whole financial system will lack of normal mobility. Misconduct will lead to financial crisis. Financial crisis will influent production, circulation and consumption areas in real economy. The continue development will cause economic crisis.Fifthly, the statistical accounting of fictitious economyThe statistical accounting of the fictitious economy is the practical needs to strengthen the management of fictitious economy, and to prevent the financial bubbles and financial crisis. In present, the statistical accounting of the fictitious economy is still a relatively new area of economic statistics theory. As a whole, existing system of national accounts (SNA) 1993 has been covered the fictitious economy, but the system of national accounting has more focused on input-output accounting of the real economic activities, not described the fictitious economy as a major separation subsystem of the national economy. We can't directly observe the specific operating state of fictitious economy in the current national accounting system, and forecasting the developing trends of fictitious economy and its impacts on real economy.Aim at the deficiencies of the existing system of national accounts for the fictitious economic accounting, according to characteristics of the virtual economy and the macro-economic management requirements, on the basis of national economic accounting system such as monetary and financial statistics and national accounts system, the thesis has assimilated the fictitious economic accounting research results of the domestic scholars, defined the scope of fictitious economic accounting, proposed the corresponding accounting methods and rules of the fictitious economy, designed and constructed the index system of fictitious economy.Sixthly, the empirical analysis on the relationship between fictitious economy and real economyAccording to the fictitious economic theory and the specific scope and the caliber of the fictitious economic accounting, the thesis established econometric model, using E-views 5.0 software tools to analyze the relationship of China's monthly trading volume of the fictitious economic trade and real economic growth and government monetary policy from 2007 to 2009. The time frame is:From January 2007 to December 2009. Specific analyzing indicators include:the trading scale of China's fictitious economy and GDP and Ml.The results of the empirical analysis shows that monetary policy will directly affect the operation of fictitious economy and the growth of real economy, and the operation of fictitious economy will impact on economic growth significantly, and economic growth will indirectly impact on the operation of fictitious economy by its impacts on that monetary policy.Seventhly, the choice of fictitious economic development Path in ChinaThe thesis reviews the development of China's fictitious economy and analyzes the status. There are still many defects of the market institutions and structure in China's fictitious economy. Financial globalization is an irreversible historical human economic and social trend. China is a developing country, and it needs to maintain steady and rapid economic development. Financial globalization does not only bring the chance of equal participation in international competition and sharing the world market, but also bring more negative impacts and unprecedented challenges in the initial stage. In this context, as an independent sovereign state which need the national economic security, how can China achieve its own coordinated development of fictitious economy and real economy, promote its overall economy develop healthily, constantly and rapidly. From the development economics, the thesis has provided some specific theoretical analysis and policy recommendations for the choice of the path of China's fictitious economic development.