Study Of The Impact Of The Fictitious Economy On The Real Economy

In recent years, with the rapid development of financial globalization and the update of financial derivatives, transaction size of fictitious economy expands rapidly, which is far more than the average growth speed of the world economy. the impact of the fictitious economy on the real economy performed more and more clear and the impact on the overall economy development is also growing. On the one hand, flourishing of fictitious economy accelerates the speed of financing, and optimizes the efficiency of resource allocation, which can also play an important role in promoting and facilitating development of real economy; on the other hand , over-expansion of fictitious economy may cause great economic risk or financial bubbles, which can result in the unrest of monetary market, when seriously, it can lead to financial crisis even to economic crisis. In turn, it may cause the huge damage on the real economy.Since 1990s, constantly breaking out financial crisis are all directly or indirectly associated with the over-development of the fictitious economy. Constantly emerging of these financial unrest and economic crisis lead us to have doubt about development of fictitious economy that are these problems due to over-expansion of fictitious economy? Do the impacts of the fictitious economy on the real economy do more harm than good or good than harm? How to ensue the coordinated development between fictitious economy and real economy? In order to answer these questions clearly, this thesis gives the comprehensive analysis on the impact of fictitious economy on the real economy from the theoretical and empirical perspectives. It also makes intensive study and proof of the relationship between fictitious economy and real economy, and the mechanism of the impact of fictitious economy on real economy are introduced, too. Furthermore, based on current circumstances of economic development in China, and associated with theories on fictitious economy and result of the empirical analysis, the thesis gives some solutions and suggestions on coordinated development between fictitious economy and real economy in China.Firstly, the thesis attempts to elaborate the development and evolvement of fictitious economy from new perspective. The initial stage of the development and evolvement of fictitious economy is represented by the process of Virtual currency. This stage started from commodity money stage, were extinct by the stage of getting rid of Precious Metals legal currency taking full control of currency system; By the constantly deepening of the degree of Virtualization, even through combination between the credit and currency and the joint-stock enterprise birthed, so did the stocks and bonds, which meant that the evolvement of fictitious economy came to the Intermediate stage. The peak of this period was marked by foundation of Bretton Woods system. Last 70s, by the Collapsing of Bretton Woods system, disappearing of currency gold standard system, currency was becoming Virtualization symbol of nation which depends the credit. Fictitious economy got the rid of control of real economy gradually, then it got on the road of independent development. Fictitious economy played more and more important in overall economy.'Money begets money'became common in the economic society. The countries spreaded this virtualization all over the world through international trade and international capital investment. Economic integration actually performed as fictitious economy integration, and the development and evolvement of fictitious economy came to the advanced stage. This part arranges the development and evolvement of fictitious economy at last.Secondly, the thesis gives the definition and connotation of fictitious economy, and clarifies basic relationship between fictitious economy and real economy and the mechanism of the impact of the fictitious economy on real economy. Real economy and fictitious economy are interdependent and mutually reinforcing with each other. The running of fictitious economy is based on real economy; at the same time it also has reaction on the development on the real economy, which has duality. This thesis also explains'double-edged sword'of fictitious economy. This thesis elaborates the mechanism of the impact of the fictitious economy on real economy. This part makes emphasis mechanism of fictitious economy in consumption and investment field.The thesis focus on the part of Empirical test and Measurement-based test , which through empirical test of the impact of the fictitious economy on real economy , stock market and the Mechanism of the impact of property market on real economy.In chapter four, marks M2 and GDP which are selected and construct can generally reflect the condition of development of fictitious economy and real economy. Select 2002-2010 in China quarterly data related, When reduce the impact of CPI, through Autoregressive Distributed Lag Approach and Bound Tests(ARDL-BT), we obtain these conclusions:Fictitious economy has the impact on the real economy. In long-term increase or decrease of the fictitious economy may result in the increase or decrease of real economy correspondingly. In addition, this kind of impact is durative, which not only reveals the significant role of fictitious economy in the whole national economy, but also reflects the degree of dependence development of real economy on fictitious economy in China.In chapter five, the thesis adopts the quarterly data of stock market and level of economic development 2003-2010 and the annual data of Chinese stock market and the level of economic development, Application based on VECM and PECM based on the long-term, short-term Granger causality test method,Through the empirical test of the relationship between stock market property market and real economy, the thesis obtains these main conclusions:The relationship between the development of stock market and real economy is cause and effect in long-term, but stock market is affected by the real economy in short-term; For property market, the development of real economy and property market have effect and cause relationship with each other in long-term, but the movement of property market has no effect and cause relationship with the movement of real economy at all.The conclusions indicate that, in long-term, the high-speed and smooth development of national economy advances the development of stock market and property enormously, and the development of stock market and property markets can also advance the healthy and sustainable development of national economy in turn; but in short-term, no matter in property market or property market, the development of these market deviate from real economy in any degree.At last, the thesis gives the countermeasures and suggestions on the coordinated development of the fictitious economy and real economy. First, focus on the relationship between fictitious economy and real economy, and lead to develop moderately. Real economy is the basis of fictitious development; it also decides the establishment, scale and operation status of fictitious economy. There is no fictitious economy if there is no real economy. So real economy should develop rapidly, and make solid establishment for fictitious economy. At the same time, the coordinated development of fictitious economy and real economy should be pay more attention, to make sure the fictitious economy develop moderately. The speed of develop of fictitious economy too fast or too slow will effect the healthy development of the real fictitious seriously.Second, Financial regulation should be pay more attention, which can also reduce the risk of development of fictitious economy. Strengthening financial supervision, we should focus on supervision of risk of financial derivatives; consolidate the cooperation to the financial supervision association, and also safeguard national economic security.Third, we should learn from the sub prime mortgage crisis, and focus on preventing risk of property market. All sorts of means or measures should be carried out to strengthen the supervision of financial system of property supervision and the healthy development of the property marked should be guaranteed.