Political Economic Analysis Of Financialization And Economic Growth

Financialization is one of the main characteristics of world economy.China’s economy is also faced with a series of problems brought by financialization,such as "from real to virtual" and "capital idling".Under the background of the new normal state of China’s economy,it is of great significance to study the relationship between financialization and economic growth.First of all,this paper studies financialization according to the theory of capital cycle,and discusses the capital cycle formula of financialization,the channel of capital source and its double influence on economic growth.Then,on the basis of previous studies,this paper constructs a two-sector model of financialization and economic growth,divides financialization into initial stage,expansion stage and collapse stage,and explores the relationship between financialization and economic growth.According to the economic characteristics of China,the theoretical part can be concluded that China is currently in the stage of financial expansion.According to the current characteristics of China’s economy,it is judged that China’s financialization is in the stage of excessive financialization.Then,the empirical analysis part uses the panel data of 31 provinces and cities from 2007 to 2017 to verify that the current degree of financialization in China has a restraining effect on economic growth.The main results are as follows:(1)The essence of financialization is that capital seeks the proliferation of its own value in the movement.(2)Moderate financialization is beneficial to the production of real economic sectors and plays a role in promoting economic growth;Excessive financialization will promote economic growth in the initial stage,restrain economic growth in the expansion stage,and will collapse if it continues to develop.(3)China’s economy is in the expansion stage of excessive financialization,and the current degree of financialization suppresses economic growth.Finally,according to the conclusions of the study,the corresponding policy recommendations are put forward.