Financial Structure,Inflation Expectation And Financial Cost

Under the influences of domestic and overseas economic and financial situation,Chinese economy still faces huge downward pressure.Meanwhile,as the credit risk is getting momentum,the further reduction of the liberalized interest rate also faces difficulties.Although Chinese monetary policy is quite prudent and the credit and loan growth maintains the stable speed,there is a huge gap between the credit investment increments with the total social financing increment,which also curbs the decrease of the financing cost.Therefore,under the dual constraints of risk premium increase resulted from the credit risk increase and the marginal effect decrease of monetary policy resulted from the "liquidity trap",how to figure out approaches to alleviate the financing gap and reduce the financing cost become the urgent problem to be solved.On the basis of this,this paper studies the long-term influential factors for the financing cost from perspectives of financial structure and expected inflation and how to reduce the financing cost effectively in a short term.This paper comprehensively considers the long-term equilibrium and short-term dynamics of financing cost.On one hand,on the basis of the perspectives of structure and expectation,it constructs the cointegration model to empirically demonstrate the Granger causality and long-term equilibrium relation among Chinese financing cost,financial aggregate supply,financial aggregate demand,financing supply structure,financing demand structure and inflation expectations,in order to investigate the long-term influential factors for Chinese financing cost;on the other hand,this paper tries to study the influences of the changes of financial structure and inflation expectation on the short-term fluctuation of financing cost and their dynamic effects.By doing so,it could realize the short adjustment of financial cost through adjusting financial structure and guiding the inflation expectation.Therefore,the study of this paper has important theoretical significances and realistic significances.Except for introduction,conclusion and policy suggestions,this research content of this paper is divided into four chapters:Chapter 2 presents the theoretical foundation for financial structure,inflation expectation and financing cost.From the perspective of total volume,social financing cost is decided by total capital supply and total demand together.When there is the market clearing,effective supply of capital equals the effective demand of capital and the social financing level stays in the balance level.If the total capital supply and total demand deviate from their effective levels,it might cause the increase of financing cost.Financing supply structure and demand structure would affect the effective supply level and demand level of capital.Even if the social financing cost stays at a balanced level,the social financing cost would still stay high when the effective supply level of the capital is low and the effective demand level of the capital is relatively high.Inflation expectation would also affect financing cost.The relatively high inflation expectation would raise the price level,raise the financing demands of the public and manufacturers and thus increase the financing cost.Besides,the rise of the inflation expectation would cause the rise of the benchmark interest rate as well as the financing cost.On the basis of the quarterly data of 2000.1-2014.IV in China,chapter 3 analyzes the indicator selection and data features of Chinese financial structure,inflation expectation and financial cost.In terms of the total financial supply,this paper adopts both the financial interrelations ratio and financial deepening ratio to evaluate the influences of financial deepening of different levels on the financial cost.For the total financial demand,this paper uses the total social financing scale ratio to make evaluation.In terms of the financing supply structure,this paper evaluates the financing supply structure with the ration between direct financing with indirect financing.In terms of the financing demand structure,this paper sets indicators from three aspects of term,subject and function.The higher the term structure value it is,the bigger the short-term financing ratio and the short-term financing cost would be;the bigger the subject structure value it is,the higher the personal financing ratio,financing risk and financing cost would be;the bigger he functional structure value it is,the higher the speculative financing ratio and the more significant of the "crowding-out effect" of speculative capital demand for the production capital demand would be,which increases the financing cost.For inflation expectation,this paper uses two indicators of rational expectations and adaptive expectations to evaluate expectation.For financing cost,this paper refers to the international common practice that it takes the inter-bank borrowing capital price among financial institutes as the liberalized interest rate of a nation and adopts the SHIBOR and REPO as the evaluation indicators for the financing cost.Chapter 4 takes the financial structure and inflation expectation as the entry points.It constructs the cointegration model to empirically demonstrate the Granger causality and long-term equilibrium relation among Chinese financing cost and financial aggregate supply,financial aggregate demand,financing supply structure,financing demand structure and inflation expectations.Both the financial structure and inflation expectations are important long-term influential factors for the financing cost,but financial structure has even more significant influence on the Chinese financing cost.Therefore,to reduce the financing cost,it shall mainly focus on adjusting the overall financial supply and demand as well as optimizing financing structure.To optimize financial structure and reduce financing cost,it shall work from the following aspects:increasing the narrow and general financial deepening ratio,optimizing social financing scale ratio,improving the direct financing against indirect financing ratio,optimizing financing supply structure,reducing short-term financing against long-term financing ratio,optimizing the financing demand term structure,decreasing the individual financing against institute financing ratio,optimizing financing demand subject structure,reducing the speculation against investment ratio and upgrading the financing demand functional structure.Chapter 5 constructs the short-term dynamic VEC model,empirically studies the influences of the financial aggregate supply,financial aggregate demand,financing supply structure,financing demand structure and inflation expectations on the short-term fluctuation of Chinese financing cost and their dynamic effects.The short-term fluctuation of Chinese financing cost is mainly derived from the changes of financial structure and inflation expectations.In the financial structure,the changes of narrow financial deepening ratio in the financial aggregate supply have negative influences on the short-term fluctuation and such influence is most significant.The changes of financial aggregate demand have positive influences on the short-term fluctuation of financing cost.The changes of financing supply structure have negative influences on the short-term fluctuations of financing cost,but the influences are not significant.The changes of financing demand term structure,subject structure and functional structure exerts negative influence,positive influence and positive influences on the short-term fluctuations of financing cost respectively,but the influences of financing demand subject structure is not significant;In the inflation expectations,changes of both adaptive expectations and the rational expectations have positive influences on the short-term fluctuations of financing cost and the influences of rationale expectations are more significant.According to the Impulse response analysis and variance decomposition,the impact of narrow financial deepening ratio,general financial deepening ratio,financial aggregate demand,financing supply structure,financing demand term structure,financing demand functional structure,adaptive inflation expectations and rational expectations contribute a lot to the financing cost variance.Therefore,in short term,it shall reduce the financing cost by raising the narrow financial deepening ratio,general financial deepening ratio,reducing the total scale of social financing ratio,increasing the ratio of short-term financing against long-term financing and reducing the ration of speculative financing against investment financing.Meanwhile,it shall guide the public to develop rational inflation expectations gradually.