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Research On The Relationship Between Consumer Credit And Economic Growth Under The Credit Channel

Posted on:2013-04-07Degree:MasterType:Thesis
Country:ChinaCandidate:Y YuFull Text:PDF
GTID:2249330371980141Subject:Credit economy and management
Abstract/Summary:PDF Full Text Request
In recent years, the central bank of China continues to enhance the anticipationof the monetary policy, in order to adapt to the challenges brought by thedevelopment of the international and national economic and financial situations. Thecredit transmission channel has been an important role in the regulation of creditduring the implementation of China’s monetary policy. With the gradual improvementof China’s market economy laws, as a more flexible controlling mode, thecontribution of the monetary policy credit channel on regulating economicenvironment and guiding economic growth potential is becoming increasinglyprofound, enhancing the progress of the economy, promoting the vigorousdevelopment of the economy. In the context of the economic recession triggered bythe subprime mortgage crisis, to accelerate the transmission of the economic growthmode and expedite to adjust the economic structure will be the coping strategies toovercome the economic crisis in our country. As one part of the the credit, consumercredit not only meets the purpose of the consumer’s intertemporal consumption, butalso promotes the development of the economy. Consumer credit can expand themarket of domestic demand, and stimulate economic growth. With the promotion ofthe expansion of domestic demand, consumer credit has been the main part of thecredit channel, and played a supporting effect on the economy.Therefore, the paper firstly describes the development status of the credittransmission channel in China, combined with the economic theories, and makesquantitative analysis between China’s credit and economic growth. With Vector Autoregressive Model, through the empirical testing between financial institutions allbalance of loans and GDP in China, the paper analyses changes between credit andeconomic growth, and indicates that the credit transmission channel has a pisitiveeffect on GDP of China, thus proving the effectiveness of China’s credit transmissionchannel,laying the foundation for the promotion of the consumer credit.Secondly, the paper defines the realistic background of the development of theconsumer credit, and makes empirical test to elaborate the mechanism of theconsumer credit, the relationship between the economic effects and the economicgrowth. This paper makes empirical test between the credit and the economic growth,indicating that China’s credit transmission channel are considered effective. WithVector Autoregressive Model, through the research of China’s consumer creditoperating mechanism, the paper defines the consumption credit and GDP as theeconomic variables, and depicts the development path and the collaborative changebetween the consumer credit and the economic growth, and analyses the changemechanism to provide reference for the consumer credit and domestic demand.This paper makes empirical test between the credit and the economic growth,indicating that China’s credit transmission channel is considered effective. In order toensure its continued smooth and provide a basis for the promotion of the consumercredit, as the subjects in the credit transmission channel, the central bank, thecommercial banks and the enterprises need to work together. The central bank shouldstrengthen macro-control efforts and play the function of window operation. Thecommercial banks should firstly carry out the positive executive monetary policyissued by the central bank, secondly extend reasonable loans and adjust the creditsupply direction, and encourage the development of the small and mediumcommercial banks, such as the joint-stock banks and the city commercial banks. Asthe last main part of the credit transmission channel, the enterprises should broadenthe financing channels for enterprises and ensure the sound implementation of the credit policy.As one part of the the credit, after confirming the relationship between theconsumer credit and GDP, in order to promote the consumer credit and expanddomestic demand, the government should firstly, increase the guiding role of theconsumption credit, and improve the income level to enhance consumer repaymentcapacity and lower-middle class, and strengthen the contribution of consumer creditto maintain the momentum of economic growth. Secondly, the commercial banksshould strengthen the commercial banks’ risk management system to maintain steadydevelopment of consumer credit. Besides, the society should improve the personalcredit system, so that to ease the phenomenon about the information asymmetry, andmake effective communication among the strengthening of the bank.
Keywords/Search Tags:Credit Transmission Channel, Consumer Credit, Vector Autoregressive Model
PDF Full Text Request
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