Research On The Law Of Interaction Between Insurance Growth And Economic Cycle

With insurance industry resuming operation in 1979, after more than 30 years of development, the insurance industry has become one of the three pillars of our financial markets, plays an important role in macro-economic development of our country, and the insurance industry develops a variety of functions, such as risk compensation, social management, capital circulation. Since the insurance industry playing an increasingly important role, scholars have paid attention to the relationship between the insurance and economic growth. In previous studies, the research priorities can be found mainly in impact analysis between the insurance and economic growth, rather than insurance growth linked to the economic cycle. So this paper research the relationship between the insurance and economic growth at different stages of the economic cycle, based on the interaction between insurance growth and economic cycle.Based on some previous study, this paper firstly introduced the theory of the economic cycle, such as the definition, classification of the economic cycle, influencing factors of the economic cycle, and make a brief overview of the economic cycle; introduce the concept of insurance, the impact of the growth of the insurance and development process. Analyzing the mechanism of insurance and economic growth influence from the qualitative point of view. Secondly, conducts extraction on period of the index of gross domestic product and premium income with HP filter and periodize them. With the economic cycle and insurance cycle obtained, this paper inspect the authenticity of the existence of the cycle using self correlation coefficient method, turning point test method. Then, the empirical analysis is divided into two parts, one for the effect of economic growth on insurance growth, divide research time interval into two parts, analyzing the impact of economic development on insurance growth using dummy variables, establish co-integration equation and impulse response. The results show that, during the period from 1983 to 1998, economic growth is counterproductive to insurance growth when the economy is prosperous. However, during the period from 1999 to 2014, economic growth is promoting the development of insurance. In addition, the establishment of cointegration equation shows that, economic growth is still promoting the growth of insurance without considering whether or not economic prosperity, and in 1999-2014 years to promote a greater role. The second part, analyze the impact of insurance to economic growth using the error correction model, the empirical results indicate that inhibition of the growth of insurance in the short term fluctuations in the economy, and has a reverse correction, but in the long run, to promote economic growth in the insurance.