Financial Development And Economic Growth

In economic circles, economic growth and financial development are issues of particular concern. As we all know, A prerequisite for social development and political stability is economic growth. Continually explore and discover the elements of economic growth and economic growth to play its active role in the theoretical community has been to explore and study in depth the issue of economists is the eternal pursuit of the goal. The researches hold the view that accumulation of factors of production, resources allocation efficiency, technology progress, government action, system development and religious faith are important elements influencing the economic growth. In recent years, economists pay more attention to the contributions of financial development to economic growth. The researches support that moderate financial development is a promotion to economic growth, otherwise, it will be negative to economic growth.For our country, there is very large differences in the region whether it is economic development or financial development. It is not enough to national and local financial ecological construction, if purely research from an analysis of national level. Especially the roles and responsibilities of local government in the financial ecological construction more and more large. Therefore, it is necessary to research for the different region. Now the financial development and economic growth in research related to the local level to carry out this study is not a lot, and there are also many differences in the conclusion of the study. Financial development and economic growth promote each other means that there is a significant correlation between them, so it is necessary to reseach the relevance about the financial and economic development of Jilin Province. As one of the old industrial base of northeast,Jilin Province in the history of China's economic development has an important position and played an important role. However, with the reform and opening up, Jilin Province has started to economic recession, far behind the coastal cities. And this one, the level of financial development in a number of factors behind the factors that can not be ignored. Since reform and opening up the financial industry in Jilin Province have enjoyed great development, constantly improve the system of financial institutions, financing growing, evolving financial market system, the modernization of financial services is getting higher and higher levels. However, in relation to the process of economic development of Jilin Province, the overall finance development of relatively slow, and it has been lagging behind in certain areas. Imperfect financial system is still the bottleneck constraining economic development, but in relation to the economic development of Jilin Province process, finance the overall development of relatively slow, has been lagging behind in certain areas. Imperfect financial system is still the bottleneck constraining economic development. Compared with the developed regions, Jilin Province showing a weak financial development. What is the development of economic and financial situation of Jilin Province? What different between the region in the development of economic and financial in Jilin Province? Is there a correlation and a Significant causal relationship between financial development and economic growth in Jilin Province? Based on the above research purposes, concrete results and the main content of this article are as follows: The first part of the article , I details the research background of this article in the first and given the choice of the starting point of this topic. Then introduce the theory of meaning and practical significance of this article. Finally establish the research framework of this article.In the second part, I review the relevant research on economic growth and financial development at home and abroad. At the first, I review the relevant theory on financial development at abroad, then I comment on this basis and I review the relevant research on economic growth from the national and regional levels of a number of research findings. Finally, I focus on learning the financial development on economic growth mechanism. I demonstration its inherent linkages and mechanisms through the five major functions of financial.In the third part, I introduced the development of economic and financial situation for Jilin Province. At the first, I collected the historical data of Jilin Province from 1978 to 2007 and reproduced the course of economic and financial development. I use the region of Jilin Province and its relevant data since 2001, analysis the current state of Jilin province and its regional economic and financial development. Then analysis the main problems of the economic development of Jilin Province, mainly about : Industrial structure and layout of the state-owned economy unreasonable,insufficient investment,shortage of funds,potential lack of enterprise development and imbalance in the regional economic development. The second, after introduced the development of financial situation for Jilin Province, I analysis the main problems of the financial development of Jilin Province, mainly about : imbalance in the development of the financial sector,the total lack of financial,non-performing loans remain high,no effect of the financial industry,a low degree of financial markets and the single of financial institutions,the development of local small and medium-sized financial institutions slow,inadequate diversification of financial instruments and so on.In the fourth part, I carried out the empirical studies of the relevance for the financial development and economic growth of Jilin Province. At the first, for the selection of indicators, I selecte the financial ratios as a key indicators to measure the level of financial development and selecte the actual GDP as a indicators to measure the level of economic development of Jilin Province. In this paper, I use quarterly statistical data of Jilin Province from 1998 to 2007, give an Empirical Study on relationship of Financial Development and Economic Growth. First of all, test on smooth to the time series, then come through the Cointegration Test show that there is a long-term cointegration relationship and this relationship is a positive correlation between the financial development and the economic growth. Finally, through Granger Causality Test, we found that there is an individual causal relationship between the financial development and the economic growth. The last one, we present the conclusions on the interpretation of economic significance.In the fifth part, the conclusions of the study are as follows: In Jilin Province, the overall level of financial development lags behind, and the level of financial development (measured by the financial-related ratio ) was a downward trend year-by-year, all the growth rate is negative growth and the level of economic development lower than the most provinces, the level of financial development and economic growth can not be synchronized. In Jilin Province ,there is a big difference in the development of the regional financial and economic situation. The regional financial and economic development level of Changchun was significantly higher than the other eight areas of the province. And the differences between regions showing a trend of expansion in recent years. Changchun is the best level of financial development in nine areas, the second is Jilin, but there is still a big gap. The article considers the gap of economic development,supply and demand of funds,legal and social credit and the government's actions, all of them are the factors that affect financial development. In addition, The article use time series and econometric model to test, we found that there is a long-term positive cointegration relationship and an individual causal relationship between the financial development and the economic growth. The main reason is that the low service quality and efficiency of financial institutions and unreasonably long-term interfere with the government. Finally, above the conclusion of the study in this paper, the relevant policy recommendations was given.