Expanded Solow Model Analysis On The Impact Of Savings-Investment Conversion Rate On Economic Growth

The continuous progress of a country depends on economic growth,and capital plays a fundamental role in the development of the economy.There are many ways to accumulate social capital,but in the final analysis is derived from savings,to what extent savings can be transformed into investment constraints on the level of a country's economic development.If savings can be turned into investment completely and efficiently,the economic development will achieve the best results.As a developing country,China's savings rate has experienced a rapid growth in the past decades,reaching a high level,but the high savings rate does not represent a high economic growth rate.The data shows that the formation efficiency of China's capital is low,that is,investors can not get enough funds from the financial system.The investment funds needed for the real economy can not be obtained from the financial system in time,which will seriously affect the economic development.Therefore,it is particularly important to study the investment mechanism of saving in order to stimulate economic growth.This paper focuses on the ways and mechanism of the transformation of savings investment and the indirect transformation mechanism of finance,in addition researches positive effect of saving-investment rate of transformation on economic growth.It also proves that saving-investment rate of transformation plays a positive role in promoting economic growth,after that,an empirical study is made of the impact of the savings sector on investment.Finally,according to the facts of our country,puts forward some policy suggestions to improve saving-investment rate of transformation and promotes economic growth.This paper mainly uses two methods including literature research and empirical research.Firstly,it introduces the relevant theoretical basis.,this paper analyzes the transformation mechanism of savings investment and the indirect financial transformation mechanism on the basis of the definition of savings,investment,saving-investment rate of transformation and economic growth and other relatedconcepts.This paper mainly states the ideas from the process of capital formation,rather than the capital allocation process to consider the saving-investment rate of transformation.Using the concept of social financing scale,then introducing the traditional Solow model,the saving-investment rate of transformation is introduced in the traditional Solow model and analyzes the influence of the per capita GDP,per capita capital stock and per capita consumption.Finally,this paper uses cointegration test,error correction model and VAR model,and Grainger causality test to analyze the effect of saving-investment rate of transformation on economic growth.The results show that saving-investment rate of transformation will promote China's economic growth,and there will be a very significant promotion effect in the long term.After that,an empirical study is made of the impact of the savings sector on investment.Finally,the paper puts forward some policy suggestions from the aspects of the transformation mechanism of savings investment,including indirect financing in capital market,direct financing and the reform of state-owned enterprises.In addition,it puts forward some suggestions on how to improve saving-investment rate of transformation from the perspective of consumption.