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Assignment范文:The impact of financial development on economic growth 2018-09-25

今天Fanessay分享一篇assignment范文--The impact of financial development on economic growth,这篇文章主要讨论的是金融和经济的关系。改变储蓄率是金融发展影响经济增长的一种方式。金融体系通过庞大的网络体系、优质的服务和丰富的金融产品,最大限度地积累社会闲置资金,通过存款优惠政策和存款利率水平的变化,增加闲置资金的机会成本,所以人们持有闲置资金将存放在银行系统,社会储蓄率。因此,银行信贷资金总量将增加。所以,我们可以看出金融对经济的影响是非常大的,我们要控制好金融的发展,从而对经济的发展产生积极地影响。


According to American economist shock, finance influences economic development through its structure and function. Based on shawk's theory, this functional theory can be further studied in detail, which can be summarized as follows: finance ACTS on economic growth by improving the saving rate, finance ACTS on economic growth by improving the efficiency of capital allocation, and finance ACTS on economic growth by improving the "saving-investment" conversion rate.


The first path through which financial development affects economic growth is to change the saving rate. The saving rate of a country or region is affected by such factors as income level, deposit interest rate, expected return, pension insurance system, population age structure, cash constraint, investment and speculation demand, prevention motivation and risk attitude. The theory of financial development considers that the change of saving rate has a great influence on economic growth, so it abandons the hypothesis of exogenous saving rate of solow model. Financial system through a huge network system, the high quality service, rich products and government-backed guarantees, the maximum concentration social idle funds, they can deposit the preferential policies and changes in deposit rates increase the opportunity cost of idle funds, so as to make the people holding idle cash in the bank system, social savings rate was improved, making the total bank credit funds, both in consumer market and production market can gain more credit funds to expand consumption and increase the investment and construction, to promote economic growth of a country or region.


The second way that financial development influences economic growth is to act on economic growth by improving the efficiency of capital allocation. A country or region must do its best to raise funds for social consumption and investment if it is to develop its economy steadily and consistently. It's not enough just to get a lot of money, we have to think about how to allocate the given amount of money in a reasonable way to maximize the marginal output of capital. Information asymmetry makes a large number of investors and cash-holding residents dare not make investment decisions easily, so they have to hold on to their wealth and give up high returns, while some investors who find high-yielding projects may suffer from a shortage of funds. Therefore, the society needs a mechanism to redistribute the right to use funds, so that the capital flows to the area of high yield, so as to maximize the whole social welfare. The emergence of the capital market, especially the economic integration in today's world, makes capital flow around the world, resources are most rationally allocated and risks are dispersed in the world market.


There is no doubt that it is the financial system that ACTS as such a redistribution mechanism. The financial system can provide us with a risk-sharing mechanism that allows resources to flow to areas more conducive to sustained and healthy economic growth. In particular, the stock market with the characteristics of "three highs" provides a broad investment platform for investors, who can freely invest, buy or sell in the secondary market, and the capital flows freely in the platform, and finally flows to high yield projects. Financial institutions with the nature of investment, such as securities companies, look for the most potential economic entities in the market, provide them with bond financing and stock financing, and provide them with various services to ensure the maximization of their own earnings, and at the same time bring sufficient funds for economic entities to expand production and long-term investment. For individual investors, it is difficult to collect complete information of investment projects on their own, and the cost is large and the effect is poor, while the financial system can concentrate resources to collect information and then spread the cost of collection to investors providing services, which greatly reduces the cost of information acquisition for investors.


It can be seen that the existence of the financial system reduces the information cost, reduces the risk and improves the investment efficiency for investors. Provided financing channel for the fundraiser; It greatly improves the efficiency of capital allocation and promotes the sustainable and healthy development of economy.


The financial system provides financial security for economic construction by absorbing social idle capital, so how much of it ends up going to economic construction? We can analyze it this way, assuming that the society has 10 billion idle funds. Firstly, the financial system needs to increase the savings rate. No matter what strategies the financial system adopts, the purpose is to convert the 10 billion into savings as much as possible. Second, the savings of 8 billion cannot be fully channeled into economic construction, because financial institutions also have to incur costs to obtain savings. If the cost rate is 10 percent, then the financial system can deliver 7.2 billion. Finally, the financial system needs to think about how to allocate the $7.2 billion to achieve the most rational allocation of resources. Of course, the conversion of savings into investment involves not only cost factors, but also risk attitudes, statutory reserve ratio, excess reserve ratio and other factors. It can be seen from the examples that if economic entities want to obtain sufficient funds, the financial system needs to make efforts to improve savings rate, saving-investment conversion rate and distribution efficiency.


A sound and developed financial system can use its own strength to minimize the cost of absorption and storage as well as the cost of information transaction, so as to improve the savings - investment conversion rate and provide more funds for the construction of real economy.


The financial system provides a platform for economic entities, which has convenient payment function. It makes transactions in the market faster, reduces transaction costs and saves money for economic entities. In the past, the most traditional trading in the market was to hand over the money and deliver the goods at the same time. Due to the existence of capital turnover and product turnover, a large number of transactions that should be facilitated failed. The financial system has a large number of payment instruments, such as credit card, collection and acceptance, letter of credit, check and so on, which effectively solved the above problems and greatly increased the transaction rate in the economic market.