Research On The Impact Of International Capital Flow On China's Financial Stability Under The Background Of US Exiting Quantitative Easing Policy

Since the outbreak of the financial crisis in 2008,the United States has effectively mitigated the panic caused by the financial crisis through multiple rounds of quantitative easing policies and prompted the recovery of the US economy.At the same time,it also prompted a large amount of capital to flow into China,pushing up China's domestic asset prices,causing the real interest rate to fall,driving China's consumption and investment demand,and promoting China's economic growth.But with the recovery of the US economy,the Fed has also begun to withdraw from the quantitative easing policy,because the United States is the world's largest economy and the dollar is the most important international currency.In the context of the withdrawal of quantitative easing from the United States,the situation of international capital flows will inevitably become increasingly complex,and the new characteristics of international capital flows will have a profound impact on China's financial stability.The features of international capital flows and financial stability,the impact between them,and the measures of our government can take are the main problems of this paper.The article is divided into six parts,focusing on the lechanism of the impact of international capital flows on China's financial stability.The first chapter mainly introduces the background and significance of the research and summarizes the literature review of international capital flow theory financial stability measurement and the impact mechanism of international capital flow on financial stability.The second chapter introduces the related concepts and theoretical basis.and defines The concept of financial stability introduces the theory of three-generation currency crisis,that is,the theory of currency crisis under open economy;the third chapter uses relevant statistical data to show the current situation of international capital flows in the context of the withdrawal of quantitative easing from the United States and China's financial stability.On the basis of analyzing the status quo,the fourth chapter studies the mechanism of international capital flow affecting China's financial stability through macroeconomics,financial markets,financial institutions and real estate market;the fifth chapter is the empirical part,establishing VAR by selecting variables The model and LSTM model use impulse response and variance decomposition to empirically analyze the impact of international capital flows on China's overall financial stability indicators and the impact of international capital flows on China's multiple financial stability indicators.The results show that large-scale short-term international capital flows will have a negative impact on China's financial stability,and foreign direct investment and international securities investment inflows will have a positive impact on China's financial stability.At the same time,international capital flows will affect China's financial stability through China's macroeconomic and financial markets.The sixth chapter is based on the conclusions of empirical analysis,providing a way for China to actively respond to the possible dividends and risks brought about by international capital flows.Some targeted measures are recommended.