China's Stock Market Wealth Effect Theory

The discussion on wealth effect of stock market began in America, which means that the fluctuation of the wealth amount will influence the consumption and even influence the economy. In recent years, along with China's rapid economic growth, China's capital market has also made great development .It's a meaningful thing to research the stock market wealth effect in order to promote the consumption better and then promote economic growth.First ,this paper descript the theory of stock market wealth effect from finance, psychology, and economics and then analyst its characteristics and transmission mechanism ; second, use the up-to-date dates to do empirical analysis, then find the constraint reasons and put forward policy recommendations to improve it. Finally, introduce the monetary policy's transmission mechanism of stock market wealth effect, as well as the policy inspiration.In this paper, There are two main creative research : First , use annual data and monthly data from whole and stage point of view to do empirical analysis to research the wealth effect of stock market. Second , analyst the constraint reasons of stock market.wealth effect base on the new Environment of Non-tradable share reformThrough research, this paper come to the following conclusions:(1) China's stock market wealth effect is still relatively weak, consumption is still mainly driven by income and savings.(2) the weak of Stock market wealth effect mainly due to the small flow market value, the low participation rate in the stock market,the frequent fluctuations in the stock market, the imperfect laws and regulations, the unfair investment income and income distribution pattern and so on.(3) the stock market wealth effect has broaden the scope of the monetary policy, The velocity of money circulation , which should be considered when make monetary policy .The China's stock market is still developing , the Chinese stock market wealth effect is far from reaching saturation, and even has not really started. But with the China's stock market reform, the expansion of size of the stock market ,the increased rate of the securities, the improved performance of listed companies ,we should We should have confidence in the future of stock market wealth effect and create favorable conditions for the effective use of stock market wealth effect ,which benefit the growth of the economy...