The Effects Of Credit Assets Securitization On China's Economic Fluctuations

In recently years, as China's economy step into the new normal period of adjustment and shift, economic development mode is changing, and the financial innovation is also accelerating. Since 2012, the rapid development of credit assets securitization become the highlight of financial innovation. The development of credit assets securitization can inject vigor into financial markets, and it is benefit to economic development, but there are also hidden dangers, such as the excessive development of credit assets securitization in American, caused the subprime mortgage crisis in 2007, and it has had serious impacts on American and global economy. Thus in the pried of promotion the credit assets securitization development, it is very important to insight the influences of credit assets securitization on macroeconomic stability.This paper has carried out the following innovative research, depthly analysis the effects of credit assets securitization on China's macroeconomic fluctuations. Firstly, based on case analysis, it constructs a theoretical model which can analysis the influences of credit assets securitization on credit scale, depthly analysis the effects mechanism of credit assets securitization on credit scale. Secondly, it innovatively introduces the effects of credit assets securitization on credit scale into the dynamic stochastic general equilibrium (DSGE) model, by the channel of credit, the expanding DSGE model clears the theoretical impacts mechanism of credit asset securitization on credit scale and the theoretical impacts mechanism of credit scale on macroeconomic operation, constructs a macroeconomic analysis model which can analysis the impacts of credit assets securitization on economic fluctuations. Thirdly, based on quantitative analysis of the expanding DSGE model, it's selective quantitative analysis the effects of credit assets securitization on China's macroeconomic fluctuations, and further reveals the internal mechanism and paths of it.(1) The examples and theoretical analysis results of the effects of credit asset securitization on the credit scale show that:First, case analysis indicates that under the business model of credit assets securitization, banks credit multipliers expand. Further theoretical analysis find that, banks conduct credit assets securitization have greater each term's credit size than those without securitization. It means credit asset securitization promotes the expansion of banks credit, there by promotes the expansion of whole market credit size. Second, credit assets securitization enables banks to obtain excess returns, which accelerate banks'own capital accumulation during continually operations. In this effect, the promoting effect of credit asset securitization on credit expansion will gradually increase.(2)The theoretical analysis results of the effects of credit assets securitization on macroeconomic fluctuations show that:credit scale is an important factor of macroeconomic fluctuations, and the credit assets securitization will affect the credit scale, innovatively introduces the effects of credit assets securitization on credit scale into the dynamic stochastic general equilibrium (DSGE) model by the channel of credit, the expanding DSGE model clears the theoretical mechanism of the impacts of credit assets securitization on credit scale and the impacts of credit scale on macroeconomic operation. The theoretical analysis results show that credit assets securitization has important impacts on the macroeconomic operation by the channel of credit, and will affect economic fluctuations.(3) The quantitative analysis results of the effects of credit assets securitization on macroeconomic fluctuations show that. First, credit assets securitization's credit expansion effects, making the credit environment of financial markets has become more relaxed. Under this environment, the degree of economic operation activity will increases, it is benefit to stimulating economic growth. Second, at the same time of credit assets securitization stimulating the economic operation, the economic response magnitude to favorable and unfavorable shocks will be amplified simultaneously. So that the apex of economic operation becomes higher, the bottom point becomes lower, periodic gap becomes larger, increasing economic fluctuations. And as the credit assets securitization gradually develops, the effects on credit expansion enhances, economic fluctuations also intensifies. Therefore, there is a risk that credit assets securitization increases economic fluctuations. Thus credit assets securitization is a "double-edged sword" that advantages and disadvantages coexist. Since the credit assets securitization can stimulate China's economic activity, in the period of the new normal development, the credit assets securitization should be promoted steadily, which provides vitality and dynamism for stable growth of China's economy. Since there exists risks that credit asset securitization may cause drastic economic fluctuations, it should be paid particular attentions to norms, supervision and risk prevention of the credit assets securitization.