Metrical Model And Empirical Research On The Impacts Of The Financial Instability To Tertiary Industries Of Three Different Regions

The financial instability is a unstable state that the financialsystem cannot perform its key function effectively. The financialinstability’s adverse effects on the global economy have receivedwidespread attention in today’s society. The financial crisis is itshighest form and harm the world economy seriously. So the study on thenature of connotation, the transmission mechanism and the extent of theimpacts of the financial instability is particularly important. Thesedays, the process of financial liberalization in China is acceleratinggradually. At the same time, the financial markets are facing moreunstable factor because of the assault of international capital markets.Meanwhile, the reform of financial system still needs to deepen becauseof the unreasonable financial architecture, as well as the capitaloperating efficiency needs to be improved. So we can understand why thefinancial instability has very important effects on the development ofmacro-economy of China. Modern theories of the financial instabilitymainly follow with interest on the transmission mechanism of the financialinstability, on the basis of the traditional theory of currency stabilityand exploration on the banking institutions crisis. The financialinstability theory of Hyman·Minsky is one of them, as well as the baseof this paper.There are serious differences in regional economic development inChina. Due to the different financial structures and system efficiencyin different regions, the flowing velocity of financial elements andmarket capacity are different. There exists a big gap in the level of financial and industrial development of different regions, so the effectsof the financial instability on the economy of regions are different. Theindustrial structure in a country directly relates to the local economicdevelopment and employment issues. The current industrial structure stillneeds to be upgraded in China. To China, the country that has significantregional differences and urban-rural dual structure, the study on theeffects of the financial instability on the development of tertiaryindustries of different regions is very important; the study on thepathway and the impacts of the financial instability, is very useful tothe economic policy-making departments.For the financial instability on the tertiary industries of the threeareas, this article will explore the pathways and the degree of influenceof the impacts. This article will propose research ideas and methods, tobuild the comprehensive assessment framework and measurement model systemof the financial instability. The financial indicator system is dividedinto three pieces: Capital market moving subsystem, monetary liquiditysubsystem and macroeconomic environment subsystem. The article willselect representative indicators of every subsystem, and determine theirthreshold. On this basis, we will chose state-space model based on varyingparameters, and analyze the impacts of the financial instability on thedevelopment of the tertiary industries of different regions.Through research, we find that:⑴for the tertiary industry of theeastern region, the impacts of macroeconomic environment subsystem arebigger than capital market moving subsystem and monetary liquiditysubsystem; for the central region, the impacts of capital market movingsubsystem and monetary liquidity subsystem are more clear thanmacroeconomic environment subsystem; for the western region, the effectsof three subsystem are basically the same.⑵The trends of the impactsof total amount indicators of financial instability on three regions are similar. The impacts on central region are bigger than the eastern regionas well as the western are the biggest.⑶The impacts of ratio indicatorsof the financial instability on the eastern and central region are similar,while the impacts on the western region are exactly the opposite. Thereasons for these phenomena are that regional economic development arenot balanced, industrial structure is unreasonable, the reform of thefinancial system still needs to deepen and the asymmetry of economicpolicies, etc. We will put forward suggestions on these problems.Finally, it should be noted that the study in this article has somelimitations. The three simplified subsystems are not much overall; therepresentative indicators are not rich enough; and the empirical methodis not pretty perfect.