A Positive Study Of The Relationship Between The Fluctuation In The Stock Market And Economy In China

Since the first half of the year 2004, another bear market is seen in China. It has become the controversial and hot issue where the store market is leading. However, despite the controversy, there exists the same judgment among people that the fluctuation in the stock market is deviant from the economic cycle, and thus the stock market is immature and irrational. Therefore, it comes the consensus that partition of stock share is the crux of problems in the store market. Whether this judgment is rational or not? It is worth our researches. The answer can only be found in the study of the relationship between the stock market and economic fluctuation.The dissertation briefly introduces the evolution of western economic growth theories and the fluctuation models of stock prices in different situations. The Theory of Endogenous Growth is detailedly discussed in an untechnical way, and the relevant researches and positive studies home and abroad are reviewed and summed up. The Theory of Endogenous Growth suggests that the development of the capital can stably enhance the long- term economic growth, and it also emphasizes the function of savings in the long-term economic growth. The development of the finance just provides an opportunity to improve the rate of savings, and reduces the trade cost. The stock market can directly transform the current savings of investors into production investment. Theoretically, the development of the finance and the stock market has a positive correlation with the long-term economic growth. Economists and scholars home and abroad have proposed many theories and models trying to demonstrate and check this relationship, but haven't achieved accordance.Starting from the production of the former researches, the dissertation takes the Theory of Endogenous Growth as the theoretical base, analyzes the relationship between the stock market and the economic fluctuation on the basis of objective and detailed data, from the viewpoint of both time and space. From the viewpoint of the space, by constructing evaluative indexes of fluctuation, the dissertation calculates thefluctuation extent of the stock market and economy. After statistical analysis to the data, it shows that the price fluctuation in the stock market is connected with the fluctuation of economy, and corresponds to it to some extent. Form the viewpoint of time, the dissertation defines the stock price trend on the basis of Dow theory, and categorizes the stock price trend in China according to objective and consistent standards, which avoids the subjectivity that are usually seen in former researches. And for the categorization of economic prosperity cycle period, the dissertation adopts the prosperity data offered by National Information Center rather than the single index that can hardly reflect the economic changes. On the basis of the objective categorization to the fluctuation period of both the stock market and economy, the dissertation compares the period length, and the time of cycle turning point, and gets a conclusion different from the former studies that the stock market of China, in spite of in special conditions, can reflect the economic fluctuation and function as the economic "weather glass", which is the same situation in other developed countries. Moreover, it is concluded that the government should take the major responsibility for the abnormal fluctuation of the stock market and its deviation from the economic cycle, and that the incorrect orientation to the function of the stock market the government has made is the reason why the stock market can hardly enhance the economic growth.