Study On The Wealth Effect Of Stock Market In China

With the development of economy and society,more and more companies are listed in our country,more and more assets are securitized,the scale of stock market is becoming larger and larger,and the relation between capital market and real economy is more and more close.The impact of the stock market on the real economy is also growing.We know that although the economic structure of our country is becoming more and more optimized,compared with the mature economies,the economic structure of our country is still not entirely reasonable,there is a certain dependence on external demand,and domestic demand,especially consumption,is still insufficient.If we can make good use of the wealth effect of capital market and exert the wealth effect of our stock market,then we can promote the economic knot of our country.Structural adjustment.Moreover,at this stage,the external environment is not very stable.Whether it is Brexit from the European Union or the trade protection promoted by US Republican leader Donald Trump,under such circumstances,the wealth effect of China's capital market is thoroughly discussed.It has different general practical significance,which will bring certain reference significance for our country to adjust the economic structure,expand domestic demand and further stabilize the stock market.Many foreign scholars have also done a lot of relevant research,but the results are different.Due to the long history of capital market establishment in mature developed countries,the relative perfection of capital market,the relative maturity of investors and other reasons,their research results show that the wealth effect of their capital market is well developed.By studying the wealth effect of China's capital market,scholars in our country find that the wealth effect has hardly been exerted in China's stock market.This paper reviews the traditional theory of consumption function,analyzes the transmission mechanism of the wealth effect in capital market and the driving variable of the wealth effect in the capital market,and then considers the explanatory variable.According to the related consumption function,the related variables in the capital market are brought into the traditional consumption function,and a multivariate regression model is constructed.The cointegration test and the error correction model are used to examine the effect of the fluctuation of the capital market on consumption in the long term and in the short term respectively.This paper finds out that the capital market has a weak negative wealth effect no matter in the long run or in the short term.Of course,in the long run or In the short term,residents' income has the greatest impact on consumer spending.After that,the paper analyzes the reasons why the wealth effect in the capital market of our country has not been exerted,mainly because the scale of the capital market is not large enough,the capital market is not too mature and stable,the profitability of listed companies is weak,and the dividend is not too standard,and so on.Finally,in order to make the wealth effect of our country's capital market exert better and increase the beneficial feedback of virtual economy to the real economy,the corresponding policy suggestions are put forward according to the relevant reasons.