Research Of Relationship Between Financial Development And Economic Growth Of Wuhan

The relationship between financial development and economic growth is a key issue of theory of financial development. There are many researches on this problem these years. Those researches focus on the causality of financial development and economic growth. They use the data from different countries. However, those differences of regional finance in different countries are not been concerned. This paper uses the data of financial development of Wuhan city. The objective is to find the causality of financial development and economic growth and the characteristics of financial system of Wuhan city. The paper also testifies theories of financial structure and financial deepening. Based on these researches we give suggestions for the financial development of Wuhan city.This paper includes six parts. Part one introduces the importance and framework of the research. Part two gives theories of financial development in the developed countries and the developing countries. Part three is the overview of those researches on the relationship between financial development and economic growth. Part four is the analysis of the process of financial development in Wuhan city. Part five indicates the result of empirical analysis using the data of Wuhan city. We give the suggestions in Part six to the financial development of Wuhan city.We find that economic growth causes financial development during 1978-2001 and financial development causes economic growth during the period 1987-1996 in Wuhan city. The research also indicates that theory of financial structure is not useful in the process of financial development while the theory of financial deepening is important in financial development in Wuhan. Wuhan should exert finance-leading strategy to take good advantages of financial development.