Research On The Correlation Of Financial Stress And Economic Growth In China

With the continuous development of financial liberalization and economicglobalization, as well as the relaxation of financial regulation, financial instability hasbecome a norm phenomenon of the global economy in recent years. The frequency ofthe financial turmoil is higher and higher, and the turmoil has become more and moredestructive. The research proves that financial stress is the main cause of the financialturmoil, and the financial turmoil is the result of financial pressure accumulation.Therefore, how to maintain stable economic growth under the premise of effectivecontrol and financial pressure accumulation and so ensure the sustained and healthydevelopment of the financial system is an important research in recent years. After theaccession to the WTO our country accelerates the pace of financial reform andimpacted by the world economic fluctuations at the same time, so the financialpressure accumulate quickly. Therefore the study of financial pressure and prevent isimminent.This paper firstly combed the main research results associated with this article,and then corresponding theoretical framework was constructed. On the basis oftheoretical analysis this paper analyze the present situation of financial pressure andeconomic growth in our country, and then build a model to empirical analysis of therelationship between the two, finally on the basis of empirical analysis put forward thecorresponding policy recommendations. The specific content of this article is dividedinto the following seven chapters：Chapter1is introduction. This chapter mainlyresearches the topic background and significance, related research results, the maincontent of the research and the research methods and possible innovations andshortcomings. Chapter2is to review part of the financial pressure and economicgrowth theory. This chapter mainly introduces the theory of economic growthevolution, introduction to the theory of modern financial crisis, financial stresscharacteristics and genetic analysis, the transmission mechanism research ofeconomic growth and financial stress, etc. This chapter has a more completely analyzeof financial stress and economic growth theory. Chapter3analyzes financial stresssituation in our country. Mainly introduces the analysis of macroeconomic stress inpresent, the elaboration analysis of financial institutions present situation, the analysis of financial pressure impact factors, the analysis of the potential infectious offinancial stress, etc, This chapter conducts a comprehensive current situation analysisof financial stress in our country. Chapter4is about an empirical study on thefinancial stress index. This part from the view of bank, stock, securities, insurance,four markets select nine indicators, standardization of deviation of the data processingafter using credit weighting method to calculate the financial pressure index. Chapter5is about an empirical study on the correlation of financial stress and economicgrowth. This part establishes the financial stress index and industrial added value inthe VAR model to study the correlation. Chapter6is about the suggestions for policy.According to the empirical results, put forward policy recommendations to alleviatethe financial pressure, and to ensure the sustainable growth of the steady economic.Such as establish the whole monitoring system of auxiliary which can prevent, controland dissolve the financial stress, set up the comprehensively supervision system forfinancial stress of Banks and the market, strengthen international cooperation toprevent pressure multinational infect, balance economic development and economicstructure, reasonably planning implement progressive reform, make moderate policyproposals and open financial market, etc. Chapter7is the conclusion part for thearticle, mainly to comprehensively review and summarize the full text. Put forwardfuture research direction according to the deficiency of this paper.In this paper, the innovation is embodied in the following aspects：1, theresearch on financial stress in domestic is not much, and empirical research do less,on the basis of combing existing research results, this paper propose the morereasonable financial stress exponent measure, and conduct a comprehensivetheoretical and empirical analysis for correlation research of financial stress andeconomic growth in China.2, established a relatively complete financial pressureindex measure, analyze the empirical methods commonly used in previous papers andselect the aggregation method of deviation standardization and credit weighting, thismethod combines the advantages of several methods and measure financial stressindex more comprehensive and reasonable. Therefore, the study on the correlationbetween economic growth and financial stress is innovative.