The Study On The Effect Of Chinese Financial Development On The Consumption Demand Of Resident

Our country has long been the typical pattern of urban and rural “dual” economy, caused the significant difference in the level of urban and rural residents’ consumption. Compared with urban, the development of rural consumption market has been slower, the ability and marginal tendency of rural residents’ consumption has been weaker, which restricted the enhancement of residents’ consumption’s total level. In practice, Narrowing the gap between urban and rural residents’ consumption, and establishing the long-term mechanism of expanding residents’ consumption are not only the inevitable requirement of expanding domestic demand,but also the crucial important method of transforming the pattern of economic development. As the core of modern economy, finance is closely related with residents’ consumption and largely support of establishing the long-term mechanism of expanding residents’ consumption. As a result, it is of great importance to study the effect of financial development on the consumption of residents and explore the policies of promoting residents’ consumption by accelerating the financial development.Basing on the research results at home and abroad for reference, this paper comparatively studies the effect of financial development on the consumption of resident theoretically and empirically. Firstly, this paper defines the concept of financial development and residents’ consumption and point out the measurement. Secondly, this paper introduces the related theories of financial development and residents’ consumption. Then, elaborating the influence mechanism of the financial development to the residents’ consumption. Thirdly, the paper analyses the present situation of urban and rural financial development and residents’ consumption. Then, analyzing the correlation of them from the statistics point of view. After, the paper selects the sequential data from 1985 to 2014 and uses co-integration test 、granger causality test 、impulse response function and variance decomposition based on the VAR model and SVAR model to study the dynamic relationships between the level of urban and rural financial development and the demand of residents’ consumption. The results show that, in the long term, financial scale has a positive effect on urban and rural residents’ consumption, and the positive effect on the rural residents’ consumption is larger than on the urban residents’ consumption. Financial efficiency has a positive effect on urban residents’ consumption, while producing a negative effect on rural residents’ consumption. In the short term, the financial scale and efficiency firstly impede and later promote the urban and rural residents’ consumption. Whether in the short-term or long-term, the level of urban and rural residents’ income have a significant positive effect on the urban and rural residents’ consumption. Lastly, on the basis of theoretical and empirical research, including the present situation of urban and rural development, we put forward several policy recommendations to promote urban and rural residents’ consumption by accelerating the development of financial from four aspect, such as, increasing the level of residents’ income, optimizing the environment of consumption, developing the consumer credit and improving the insurance market.