The Cause Of The Economic Cycle—The Analysis Of The Credit Expansion

After the outbreak of the global economic crisis in 2008,the economic cycle problem once again become a hot economists research.Under the different theoretical paradigm,they found the root cause of the economic cycle different results.In spite of this,but they seem to be from different extent acknowledged that credit expansion has induced effect to cause the economic crisis.This paper explains the reasons of the economic cycle from the perspective of credit expansion,and found that the other schools of thought,except Keynes,pay attention to the role of credit expansion in the economic cycle.Then this paper points out that,although Marx has a detailed analysis that the causes of the economic crisis is the real economic problems,but he also pointed out that credit expansion may lead to the economic crisis.So I think it is very valuable to study the influence of credit expansion on the economic crisis.Through the study of the economic cycle theory,this paper summarizes two mechanisms of credit expansion in the economic cycle: the trigger mechanism and propagation mechanism.On the basis of the existing theories,this paper analyzes the situation of our country's economic cycle fluctuation from the empirical point of view,and adopts the method of personal saving-consumption to estimate the natural rate of our country.On the one hand,through the collection of domestic data,quantitative analysis and causality test,we find that the credit expansion in China has caused the market interest rate declined relative to the natural interest rate,which resulted in the increase of investment relative to consumption,especially in the construction industry and the employment of the mining sector than the transport,warehousing and postal services,wholesale and retail employment increased significantly.On the other hand,through the establishment of a linear regression analysis,we find that the ratio of investment to consumption and the ratio of early and late production are helpful to explain the cyclical fluctuation of China's economy.It is the real economy' investment and consumption ratio has been destroyed,the blind investment led to the production of excess and the distribution is irrational,resulting in serious polarization between rich and poor,these are the deeper reasons.This paper puts forward to strengthen and improve the financial supervision and make the real economy strong to avoid the economic crisis,and promote the development of the economy in our country.