A Study On The Macroeconomic Effects Of The Development Of China's Government Bond Market

Government debt financing is one of the common policy means of modern economic development.The issuance of government bonds,as the most important way to realize the financing of government debt,is widely adopted by the governments of all countries in modern market economy.Issuing government bonds must form a certain scale of government bonds,the steady accumulation of government bonds formed a certain scale economic effect on economic growth,however,due to the restriction of latent economic growth rate and other factors,the market scale of government bonds has been accumulated continuously.Once it exceeds the potential demand of economic growth,it will inevitably lead to certain scale diseconomies After the issuance of government bonds,the benign circulation of government bonds also needs to attract great attention,which extends the liquidity problem of government bonds.As an important financial asset,government bond can promote smooth transformation from savings to investment because of its good market liquidity.Therefore,market liquidity has become one of the most important symbols of a mature and developed bond market.The experience of developed countries which have mature bond market in the world shows that good bond market liquidity can play the role of government economic regulation at the macro level,and then achieve certain macro policy objectives;at the micro level,it can play the unique function of resource allocation optimization in the market,and then satisfy the investment and financing demand of the real economy.The market liquidity of government bonds is not only related to financial market infrastructure,operation rules,capacity,trading objects and behavior,but also closely related to the source management of government bond issuance.Therefore,for the development of the government bond market,the market size of the government bond market is moderate in aggregate and structurally reasonable,the adaptability of the liquidity of the government bond with the actual and potential economic growth,the economic effect of the size and liquidity of the government bond,as well as the coordination and matching between the scale and liquidity are important.This paper starts with the market scale and liquidity,and studies the macroeconomic effects of the government bond market's development.This paper studies the macroeconomic effects of government bonds,involving the issuance and market circulation,the financial and financial functions,as well as the benign development of the primary and secondary markets of government bonds,and the coordinated operation of the two markets.The effects of market liquidity and market size on macroeconomic operation not only need to study the impact of market size and liquidity on macroeconomic operation,but also the interaction and coordination between them.In the 2008 global financial crisis,which derived from the US subprime problem and then quickly diffused internationally,and the sovereign debt crisis of European countries,which then exploded in full scale,had sounded the alarm on the global government debt management,and raised new issues for the governments to carry out debt financing,government bond scale and liquidity management.After the crisis,governments generally use more loose fiscal policies and the expansionary monetary policies to spur the economy development,trying to get rid of the crisis shadow,once again,to promote a new round of government debt scale and rapid amplification,giving a certain support to the sluggish economic growth,at the same time it will certainly lead to greater accumulation of bubbles and accumulation of hidden risks in the bond market and the financial market as a whole,including the government bond market.Global debt reached a new peak of $244trillion in 2018,and global debt pressure come to a head of unprecedented severity.According to the prediction of the IIF,the total global debt in 2019 may reach a record high of more than 255 trillion dollars,which is more than three times of the global annual economic output value.The global debt leverage is unprecedented high,and the debt pressure is also reaching an unprecedented peak level.The chinese government bond market developed quickly along socialist market economy with chinese type,giving impetus to the national economy and community development.In these years,the issuance scale of local government bonds has begun to surpass that of national bonds issued by the central government,accounting for a record high of57.66 percent of government bond issuance in 2018.Therefore,based on the perspective of market scale and liquidity,this paper studies the macroeconomic effects of the development of government bond market,which has both theoretical and practical significance.This paper reviews the existing documents by sorting out related ones in the world.Most of the existing research focuses on the scale and effect of government debt.The research on liquidity problem of government bonds is still rare,and there are big limitations.There are a few studies to try to carry out the measurement and comparison of the liquidity of government bonds,but the macroeconomic effect on the liquidity of government bonds is still weak.Therefore,based on the dual perspective of government bond scale and liquidity,this paper discusses the effect of government bond on macro economy.The main research comments are as follows:on the basis of the quantitative research and analysis of international experience,it firstly provides some reference and reference for this research from an international perspective;Through literature review and relevant theoretical preparation,the concept of government bond scale and liquidity and China's current status are clarified and reviewed,and the research hypotheses are suggested.According to this,a new IS-LM model incorporating the scale and liquidity of government bonds is constructed,and the effect of the scale and liquidity of government bonds is studied from the perspective of theoretical source.Further,by building a multisectoral dynamic stochastic general equilibrium model,providing the theoretical basis and data simulation for our country government debt scale and liquidity effect research;Then,through the construction of TVP-SV-VAR model,dynamic research was conducted on the connection of government bonds,financial leverage and gdp growth,as well as the connection of government bonds,debt leverage and inflation from a time-varying perspective.Finally,based on the quantitative analysis of the government bond size and liquidity effect of the international sample countries(regions),the empirical verification from the international perspective is provided for the conclusion of this study.The research conclusions of this paper are as follows :(1)The expansion of government bonds is generally conducive to economic growth;(2)The expansion of government bonds is easy to promote the increase of financial leverage;(3)The enhanced liquidity of government bonds is generally conducive to promoting economic growth;(4)The excessive enhancement of government bond liquidity is likely to lead to the accumulation of financial risks;(5)The benign interaction between government bond size and liquidity is conducive to the coordinated operation of government bond issuance and circulation.Policy recommendations mainly include :(1)The issuance of government bonds should be closely linked to the fundamentals of macroeconomic operations.Based on the macroeconomic operation of the government bond issuance should not only pay attention to the total amount of the basic moderate,but also focus on the optimization of the term structure.(2)The liquidity of government bonds should not only focus on the improvement of market rules,but also on the expansion of the investor base.(3)Sufficient attention should be paid to the matching and benign interaction between the size and liquidity of government bonds,we should further deepen and expand the development of the government bond market;(4)The expansion of government bonds in scale should not only meet the inherent requirements of economic growth,that is,take potential economic growth as the criterion,but also pay attention to the development trend of inflation.(5)The government should pay attention to the coordination of various policies in the economic adjustment,implement the relevant policies and measures of counter-cyclical adjustment well,keep the market liquidity reasonably abundant,and support the sound development and positive movement of the government bond market.