Study Of The Chinese Stock Market And Economic Growth Relationship

Stock exchange is the need for building Socialism Market Economy and it's an important mean to promote economic system reform, to perfect market system, to purify modern company system. Analyzing the relation between stock exchange and economy growth, revealing stock exchange's effect to economy growth, is the premise of knowing stock exchange's location in economic system and to develop it more. This paper analyses relation between stock exchange and economy growth by theory and demonstration analysis, then reveals the stock exchange's promotion effect. On this base, we seeing about relation between them, to analyze demonstrational stock exchange's contribution to economy growth, to discuss a more effective way to economy growth, all these have theory and reality meaning to stock exchange development and economy growth.This paper follows the way of science study, and will use ways of demonstration study, theory study, contrastive analysis, quantitative analysis, qualitative analysis, consulting. And will analyzes some figure by statistical analysis.The paper includes three parts:The first part: Demonstrational analysis of stock exchanges contribution to economy growth. Pagano model is a typical model in modern financial theory that illustrates the capital market how to promote economy growth. This model uses inter-produce theory as fundament, and supposes productivity is add-fiinction of total capital, material capital and human capital can be produced by the same technology, that is to say ,if capital can be enlarged, it can realize economy growth. Associated with the U.S. case, we can conclude stock exchange's effect to economy growth: stimulating expenditure, make the investment accelerate higher; making better use ofcapital; making the economy periodic fluctuation more receivable. At the same time, if stock exchange inflates too much, it will take bad effect.The second part: The stock exchange situation and analysis of promotion effect to economy growth. Our country's stock exchange developed from little to big in the past more than ten years. Now it has developed an important part of economy, and has exerted active in economy development. But now it has little contribution to economy growth, reasons are: China stock exchange's development rule is disturbed by administration badly; owner right structure and owner right base have problems; investor isn't perfect; media company has problems; etc.The third part: Advice for exerting stock exchange's promotion effect to economy growth fully. We must go active and step-by-step, promote stock exchange's development. In practice, we try to do the followings: to perfect stock exchange development rule; to enhance supervision on media company, avoid financial adventure; to use stock exchange to promote adjusting and upgrade of economy structure and industry structure to use the stock exchange fully to realize state owned strategic recomposition and help the private company, produce micro base for economy growth; to use stock exchange to invent new technology and high-new technology industrialization.After discussion the relation between stock exchange and economy growth, we get a conclusion: now stock exchange hasn't had promotion effect to economy growth that it should be. So we should make policy to promote stock exchange, exert its promotion effect to economy growth.