China's Credit Cycle Fluctuation And Its Non-linear Effects On Economic Growth

China's high-speed credit growth has played a crucial role in promoting economic development.However,in recent years,large-scale credit and the palliation of economic growth have shown that the role of credit growth in economic growth does not appear to be as pronounced as it used to be.This shows that China's credit growth has a complicated impact on economic growth.At the same time,in 2016,the central bank changed the dynamic adjustment mechanism for differential reserves into the Macroprudential Appraisal System(MPA),and included off-balance sheet financing in the first quarter of 2017 as a generalized credit assessment indicator in the MPA.The increasingly stringent regulatory requirements in the long-term will put downward pressure on the growth of bank credit,and the funds allocated to the economy will also be affected.Based on this background,this paper deeply discusses the dynamic relationship between credit cycle and economic cycle,the impact mechanism of credit cycle fluctuation on economic growth,and the impact of MPA assessment system on credit and economic growth.The test of the dynamic relationship between the credit cycle and the economic cycle shows that:(1)In its operation,Credit has exhibited asymmetric characteristics of "strong expansion" and "weak contraction".(2)There is a time-varying synergy between the credit cycle and the economic cycle.Credit growth generally shows a positive effect on economic growth,but it also occasionally shows a negative relationship with economic growth.On the other hand,the fluctuations of the credit cycle have shown the following effects on economic growth:(1)The positive and negative impacts of credit have an asymmetrical impact on economic growth.The rapid economic growth driven by high-speed credit growth is more significant than the economic slowdown driven by low-speed credit growth.(2)Since China's economy has gradually slowed down,the effect of credit on economic growth hasbeen less pronounced than in the past.(3)Increasing the credit supply has a significant effect on the economic growth during the economic contraction phase than on the economic growth phase.The time reach to the maximum impact is also shorter.Further,based on MPA's assessment framework,this paper analyzes the impact of MPA on credit and economic growth.The analysis shows that the general credit growth rate of commercial banks is limited by the constraints on capital adequacy in MPA,but its purpose is to make the general credit growth rate into a reasonable growth rate range.The downward pressure of the general credit growth rate does not have a significant impact on economic growth.Instead,it will help improve the soundness of economy.At the same time,MPA guided bank funds back to the balance sheet.To a certain extent,the banking system and the real economy have been brought closer.Based on this,this article explores the ways of the banking system serves the real economy.This will provide a useful reference for the transformation and upgrading of China's economic structure and the improvement of the effectiveness of credit policies.