The Research On The Influence Of China's Financial Development On Its Economic Growth

With the deepening of financial reform,the modern financial system has played a vital role in the development of the real economy.The establishment of a stable and effective financial system has become one of the macroeconomic strategic objectives of our country.China's financial deepening,financial system reform and the start of the economic transformation,the past financial and economic growth research may no longer apply to the status quo in China.Therefore,it is necessary to reorganize and study the financial theory combined with China's economic development.There are still some controversies about the specific transmission mechanisms and the degree of influence between the scholarly research and the financial and economic development.In view of this,this paper attempts to analyze the factors and the degree of economic growth of China's financial development.First of all,this article combs and reviews the theory of financial development and economic growth at home and abroad.These are on the subsequent theoretical derivation and the choice of empirical indicators play a reference role.Secondly,this paper analyzes the five economic functions of finance and analyzes in detail the role of each function in economic growth.Then,based on the theory of predecessors,this paper constructs the endogenous growth model(AK model)to decompose economic growth factors into savings rate,savings-investment conversion rate and marginal productivity of capital,and combs the specific factors.Financial development drives economic growth by influencing these three indicators.On the contrary,the economy through the three areas of demand feedback and stimulate the development of the financial system.Moreover,this paper describes the relationship and experience characteristics of China's financial and economic development after the founding of the PRC,divides the financial development into three dimensions: financial scale,financial structure and financial marketization to analyze the latest situation of financial development,and at the present stage,Development encountered some problems.Finally,based on the theoretical part,this paper analyses the use of the related data from 1978 to 2015 in China as the foundation,using the vector auto-regression model and granger causality test,analysis of China's financial development to economic growth,savings and capital marginal productivity and the short-term dynamic change characteristics of conversion from saving to investment.Research shows that: China's financial development can improve the short-term curbed the marginal productivity of capital,long-term increase the marginal productivity of capital.Financial development in economic growth,the savings rate,the conversion from saving to investment and capital marginal productivity granger reason.Through the VAR model,financial development changes not only promoted the savings rate in the short term,the improvement of conversion from saving to investment,and promote the economic growth.Finally,according to the empirical results conclude and put forward policy Suggestions.