Dynamic Model And Empirical Research Of Financial Instability On Shandong Province Economic

In the background of the financial globalization,our financialliberalization process is speeding up，the connect of our financial marketdevelopment and the world financial market is closer and closer,particularly,financial instability sector is increasing.From the histroyof international financial sector development,it is a normal phenomenonthat there are some instability factors,this phenomenon has not onlyagainsted a country or a economic community on its financial structure,butalso been directly or indirectly impacting on smaller area’s economicdevelopment of the state.In theory,many world famous experts and scholars on the financialinstability are researching most at the analysis of the causes andconsequences of the financial instability,but few at the application ona more comprehensive approach to the financial instability’s impact ofthe real economy,let alone to the regional economic impact studies.So,studying financial instability in the influence to region’s economic,andto maintain financial stability in the region’s economic policyrecommendations is important.Shandong Province is extrovertedeconomic,not only connected with domestic economic,trade for its economicdevelopmenting has important contribution,too.Therefore,the study intheory of financial instability in Shandong economic impact and influenceway is added to the financial instability theory,and it is of greatsignificant and valuable.Considering the existing documents,the actual situation of ourcountry’s financial,and the comprehensive consideration of the availabledata and models to operation,the paper has divided the financial indicator system into three parts:Capital market moving subsystem,monetaryliquidity subsystem and macroeconomic environment subsystem.Then thepaper chose two indicators(one total indicator and one ratio indicator)toestablish the dynamic effect models of financial instability to Shandongareas’ GDP and CPI.By empirical studies we got the following conclusions：⑴From the total and ratio models,we got a result that the degree offinancial instability influence to Shandong area’s GDP is larger than thedegree of financial instability influence to in Shandong area’s CPI.⑵The empirical results of the total and ratio indicators are same thatmonetary liquidity subsystem to Shandong province economic is the mostsensitive,macroeconomic environment subsystem to Shandong provinceeconomic is the second one,and the capital market moving subsystem is thefewest sensitive one.In the above,the paper took the monetary liquidity subsystem as theexplicaition indicator,and established the dynamic models of thefinancial instability system to Shandong area’s foreign trade,industryand real estate,and then we found：⑴The influnces of monetary liquidityindicators(m2/m1and m2/gdp) to Shandong area’s foreign trade and industryis positive,but the influnces to real estate is not only positive,but alsonegative,and at last the influnces both came to zero.⑵The empiricalresults of the monetary liquidity indicators to Shandong province’sforeign trade is the most sensitive,the influnces to industry is thesecond one,and the influnces to real estate is the fewest sensitive one.At last,because of the limitations of the available datas and researchmethods,the empirical study of this paper has yet to be on a furtherstep,and the author will be in the study and work on this research ofsubject.