The Study Of Relationship Between The Efficiency Of Stock Market And The Development Of Economics

Since the birth of the stock, it has been attracting scholars to continuestudying,with well-developed stock market, financial studies of the stock graduallyformed the theoretical system.Scholars have also been studying the theory ofeconomic development,some scholars concluded that the stock market can promoteeconomic growth,conversely, some scholars believe that the stock market hindereconomic growth.China’s stock market set up lately.While the rapid pace ofdevelopment,the market still need improvement.Studying the relationship betweenstock market efficiency and economic development,it can reveal the problems ofstock market,make recommendations for improvement,play the functioning ofmarkets better,and promotes economic development.In this paper, author describes the relationship between the stock marketefficiency and economic development from both theoretical and empiricalperspective.In the body of the paper, firstly,it reviews the theory of economic growthand stock market,secondly,author make theoretical analysis about Thentherelationship between China’s stockmarket efficiency and economic development,mainly from the positive impact of the negative impact of both.Finally,makeempirical analysis.This paper verify the dynamic relationship between China’sstockmarket efficiency and economic development with the data from1998to2013.The paper get the following conclusions:firstly,there exists a long-term positiveequilibrium relationship between stock market size and economic development,anegative long-term equilibrium relationship between stock market liquidity andeconomic development.Secondly,Granger causality exists between China’s stockmarket efficiency and economic development,economic growth does not lead to highefficiency of the stock market,the stock market and can cause changes of economicdevelopment.Thirdly,in short time,the growth rate of cap and value can enhanceeconomic development,but the growth rate of tur will exert a negative impact. Finally,the author make suggestions about the size and liquidity of stock market.