A Study Of Relationship Between Household Saving And Stock Market

National economic stability and social development need the healthy operation of the banking system and securities market.China's securities market established in the Early 90s last century, Played an irreplaceable role in opening channels of direct financing. China's banking system also played a significant role in promoting national econimics. While household savings played an important factor in the development of banking system and stock market.With the reform and development the amount of household savings shows a "leap frog" type of growth, Such a huge savings not only had provide a solid funding base to modernization of the nation, but also has played a role on the health of the banking system and securities market.From the recent analysis datas we can see, as China's stock market lanch a continiuous wave of rising price in mid-2006, and a decline by early 2008 for bad international financial enviroment, large amount of household savings walk in or out the stock market. In 2008, after the stock market decline, in February 2008, RMB deposits increased significantly. So, whether there is interaction between the linkage of the relationship? This paper attempts to combine theoretical and empirical to analyze.In this paper, from the theoretical analysis, Review of relevant literature describes the profile of household savings in China and China's stock market development at the present stage.In the empirical analysis apart, using the methods of modern econometric relationship between the empirical analysis carried out on the main tool proposed in 1980, Sims VAR model VAR (Vector Autoregression) and Engle and Granger proposed in 1987 cointegration theory; in terms of data selection, respectively, of the overall sample interval (2000.01 2009.12) and the early sub-sample interval (2000.01-2006.04) and late sub-sample interval (20006.05-2009.12) in the amount of household savings and the stock market turnover data for statistical analysis. Finally, on the basis of empirical results of caues of banking and stock market in China has and put forward some policyly recommendations.The empirical results show:the mutul linkage between the stock market and household savings truly existed. Granger causality test show:in the short term, the amount of household savings is the Granger causalty to the stock market, this short-term effects always in the selected three samples. Long-term results from the Granger causality test shows that the first sample interval exist two-way Granger causalty betwenn household savings and stock market turnover.In the last part of the text, concluding the results of theoretical and empirical analysis. And put forward some constructive advices to the banking system and stock.