Dissertation > Excellent graduate degree dissertation topics show

The Effect of Bank Credit and Price Fluctuations on Economic Growth

Author: ZhangXueYe
Tutor: WuJunLiang
School: Chongqing University
Course: Applied Mathematics
Keywords: Bank credit scale Economic growth Price fluctuation
CLC: F832.4;F726;F124
Type: Master's thesis
Year: 2011
Downloads: 239
Quote: 1
Read: Download Dissertation

Abstract


Since the reform and open policy, China’s economy has kept a fast developing momentum with an average growth rate of 9 percent each year. Many scholars have conducted some deeply researches about the resource of Chinese economic growth, and made some significant contribution to the theory of economic growth. This paper focuses on the effect of bank credit and price fluctuations on economic growth, and analyzes the correlation and Granger cause relationship between bank credit, price and economic growth through theoretical and empirical methods.Under the influence of the financial crisis, China adopted the proactive fiscal policy and loose monetary policy. Since November 2008, the scale of credit has an abnormal expansion trend. Whether the massive growth of China’s bank credit has an obvious effect on promoting the economic growth? Does the credit expansion have a sustained impact on economic growth? At the same time, what about the relationship between price fluctuations and economic growth?In this paper, we start our research based on the reality of China’s macroeconomic and financial environment. We conduct an empirical study on the relationship between bank credits, price fluctuation and economic growth with VAR model and the data from January 2000 to November 2010. Firstly, we used Johansen’s cointegration test methods and the vector error correction (VEC) model to analyze the impact of credit scale and price level on economic growth. Then we analyzed the impulse response between the variables based on Granger causality. The results show that: (1) There is a long term cointegration relationship between GDP and credit scale and price. (2) There is bidirectional Granger causality between bank credit and economic growth. The bank credit has a promotive effect on economic growth, and the economic growth promotes the growth of credit at the same time. Economic growth is Granger causes price level, but price level is not the cause of economic growth. It shows that China’s rapid economic growth will lead to price rises. (3)There is a significant positive impulse response of the bank credit to the growth of economy, and bank credit has a large contribution to economic growth. However, price level has a weak impulse response on economic growth and its contribution is small. Finally, we pointed out that, large scale of bank credit played a great role in promoting economic growth. But as well as the substantial increase in credit stimulating investment and increasing consumer demand, it will lead to price rises and strengthen potential inflation. So commercial banks are supposed to reasonably control the pace of loan supply, and should focus on adjusting and improving the structure of commercial bank credit, in order to maintain a balanced and sustained economic growth.

Related Dissertations

  1. The Research on the Relationship between Graduate Scale and Economic Growth,G643
  2. Research on Convergence of Regional Economic Growth Across Three Provinces in Northeast China,F127
  3. Research on the Change of the Degree of Polarization in Urban-Rural Income in Central China,F127
  4. Study on the Economic Growth of Jilin Province Based on Perspective of Manufacturing Industrial Clusters,F427
  5. The Effects of Financial Services Trade Liberlization on Economic Growth in China,F832;F124;F224
  6. An Academic Research about the Influence of Institutional Culture on Regional Economic Growth,F224
  7. Industrial Aggreagation and Regional Economic Growth,F279.2;F224
  8. Research on the Relationship of China’s Economic Growth and Economic Structure,F124;F121
  9. After the crisis phase of expanding consumption demand,F224
  10. US Innovation & Its Enlightenment to China,F171.2;F124
  11. Studies on Early-warning Model and Simulation Structure of Brain Drain in Jilin Province Based on System Dynamics,C964.2
  12. Relationship Between Education Investment and Economic Growth,F124;F224
  13. The Analysis on the Performance of Public Health Expenditure in China,R197.1
  14. Low-carbon economy of China's economic growth mode transformation,F205
  15. Transformation of the mode of economic development in Heilongjiang Province Research,F127
  16. A Study on Positive Flscal Pollcy Effect in China during Post-crisis Perlod,F812.0
  17. Research on Automobile Industrial Cluster in Shenyang,F224
  18. Comparative Study on Economic Growth Issues of Jilin and Guangdong Provinces,F224
  19. A Study on Relationship between Financial Assets Structure and Economic Growth of Guizhou,F127;F224
  20. The Negative Impact of China’s High Savings Rate on the Economy and Countermeasures,F124;F224
  21. A Research about the Relationship between Trade in Financial Services and Economic Growth,F753;F13

CLC: > Economic > The world economic profiles,economic history,economic geography > China's economy > Economic construction and development
© 2012 www.DissertationTopic.Net  Mobile