The Research Of The Impact Of China’s Credit Fluctuations To Economic Fluctuations

A lot of economic facts show that the expansions and contractions of credit becomes the important driving force to the volatility of the real economy. As a bridge that combines macro-economic and micro-economic, the credit has the effects that much more than in the financial level, it also partly reflects a country’s economic trends, policy orientation, enterprise benefit and so on. So the credit may cause some influences and impacts to economic fluctuations. As a result, it’s the deep reasons of China’s economic fluctuations from the perspective of credit fluctuations now that one of the focused issues.Based on the theory of the Credit Cycles and Business Cycles, we have set up the analysis framework that credit fluctuations influence economic fluctuations. By using the Method of Stylized Facts, we’ve described the characteristics of China’s economic fluctuations and credit fluctuations objectively. Then, we use CF filtering method to decompose the fluctuation compositions on China’s credit and economy, and concretely analysis the impact of the credit fluctuations to economic fluctuations from three Stylized Facts including Volatility, Co-Movement, and Persistence. The results of the study show that, generally leading Business Cycles about four quarters, China’s Credit Cycles are procyclical and have persistent influences on economic fluctuations in the long run.For further analysis of the structured influence of China’s credit fluctuations to economic fluctuations, we’ve established the entity economy channels of it from three main areas-consumption, investment, export and import according to the Expenditure Approach of GDP. The results show that, credit fluctuations in China could impact economic fluctuations through consumption, investment, import and export channels. Among them, the credit waves have the same direction of consumer fluctuations, opposite directions of government spending waves, import and export fluctuations, and a small negative relationship with investment fluctuations in the short terms. Credit fluctuations about leading consumer fluctuation three to five quarters, leading investment fluctuations five quarters, and have negative frequency relations with the import and export. The influences of credit fluctuations to consumption, investment and the import and export are all sustainable.Therefore, there’re some influences of credit waves to economic fluctuations in China. So we have to deepen the understanding of credit fluctuations and economic fluctuations, build an economic fluctuations credit analysis perspective, and analysis and the interactive relationships between them more systematically. In addition, we still have to improve the effectiveness of the credit policy in China from both the macro environments and micro bases. Only if the credit policy is constantly with economy and finance have the effective implementation of the economic policy and steady development in social and economic be ensured.