The Re-recognition Of The Relation Of Borrowing And Lending In The Economics

The relation of the borrowing and lending, is one type of economic relations among people. It has existed in our economy for a long time, and plays an important role in the economy. For a long time, the economics has paid much attention to the production, allocation, exchange and consumption, and neglected borrowing and lending, which is one important part of the economic relations. Therefore, to include the borrowing and lending in economics and understand its influence on the economy, could help us to understand the law underlying the economic phenomena, and develop the economic theory.The relation of borrowing and lending plays a significant role in both the micro-economy and macro-economy. In micro-economy, The functions of wealth saving and resource allocation influenced on the decisions of the people. First, borrowing and lending brings benefit for both the borrower and the lender, which could satisfy the resource demand of the borrower, and satisfy the lender with saving and increasing the value of his wealth. The borrowing and lending becomes one way to saving the wealth. Second, people make decisions by evaluate the benefit from every way to saving and their demands, which allocate the resources among each other in economy. Lastly, the borrowing and lending, together with the exchange, allocate all the economic resources in the economy. The borrowing and lending, together with the exchange, are two two wheels of a carriage of the resource allocation.In macro-economy, borrowing and lending influences the economy both directly and indirectly. On the one hand, borrowing and lending influences the economic growth and price level directly. When we account the economic growth, we include the monetary benefit from the borrowing and lending, so the result of borrowing and lending directly influences the economic growth. In addition, the borrowing and lending occupies a large amount of money, which changes the money allocation between the real economy and fictitious economy, and direct influences the price level in real economy. On the other hand, borrowing and lending influences the macro-economy by changing the consumption, investment and government expenditure.With the development of economy globalization and economy fictionalization, the global economies integrate with each other. The economies in the world integrate from the original places of raw material to the world market by the production and exchange on the one hand. The economic entities integrate in the world by the borrowing and lending on the other hand. The exchange, together with the borrowing and lending connect the economic entities, and the global economies become a complex economic net. The sub-prime crisis in America and the sovereign debt crisis in European countries remind us to understand and pay more attention to the borrowing and lending in economy. Whether the borrowing and lending develops well or not, will not only influence the benefit of the borrower and the lender, but also influence the development of global economy.