Research On The Impact Of External Financial Shocks On The Development Of An Open Economy

With the evolution of human society and the development of productive forces,the flow of commodities,capital,labor force and technology has been gradually realized in the world,which has promoted the continuous improvement of the level of economic development.The development of the world's major developed economies and the rise of emerging economies as a group demonstrate an empirical logic——openness facilitates the free flow of factors of production between economies and the global optimal allocation of resources,and the economic development of the formation of a positive role.Open economy has become an important development model for the modern economy to participate in the rational allocation of global resources and promote the development of national economy.However,while significant progress has been made in opening economies over the past few decades,theorists have first recognized that the more open an economy is to trade and capital flows,the more vulnerable it is to external shocks.The events of several crises in history have shown just as profoundly that no open economy can insulate itself from shocks in other parts of the world.At present,the world is facing great changes not seen in a century,the international trade and financial situation is complicated,the economic instability and uncertainty are growing day by day,and the external import risks exist for a long time.From the perspective of external financial shocks,this paper takes "Constructing Research Foundation——forming theoretical analysis——developing empirical test——exploring realistic approach" as the overall thinking and research path,systematic analysis of the impact of external financial shocks on the development of open economy.In the part of constructing the research foundation,this paper starts with a systematic review of a large number of domestic and foreign research literature to form a basic understanding of the topic,and then on the basis of the existing research,it forms the definitions of "External financial shock" and "Open Economy" under the framework of this paper,and analyzes the structural features and trends of open economy at the levels of trade,finance and factors,the stability,openness and order of the development of open economy are refined.Finally,it analyzes the theory of financial shock,the interaction between open economic development theory and practice,"Shock——Transmission Mechanism" and other related theories.In the analysis of formation theory,it is divided into two chapters,corresponding to the second chapter and the third chapter.In the second chapter,the focus is on the impact of external financial shocks on the transmission channel of open economic development analysis.In this chapter,the research means and methods of decomposition analysis are used to decompose trade channel into import and export trade channel,trade financing channel,and financial channel into exchange rate channel,Bank Channel and non-bank financial institution channel,factor channel is divided into labor factor channel and technical factor channel,and it is analyzed from three aspects: channel generation,expression form and importance.In the third chapter,the emphasis is on the analysis of the impact of external financial shocks on the development of open economy.On the basis of the second chapter,this chapter first analyzes the impact of external financial shocks on the stability of open economic development.Secondly,it analyzes the impact of external financial shocks on the level of trade openness,financial openness and factor openness.Finally,the paper analyzes the impact of external financial shocks on the order of opening in the development of open economy.The second and third chapters constitute the theoretical analysis of the "shock-transmission mechanism" of the external financial shock affecting the development of open economy.In the part of empirical test,according to the theoretical analysis,empirical thinking,the construction of external financial shocks and open economic development indicators and empirical model.This article selects the emerging economies as the analysis sample,this paper focuses on the impact of external financial shocks on the open economic development of eight emerging economies,including China,India,Brazil,Mexico,Indonesia,Turkey,Thailand and Argentina,from 2000 to 2018.GARCH model is used to deal with the Financial Shock Indicator,and FSI and OEI are established by entropy weight method.On this basis,the impulse response function and variance decomposition of VAR model are used for regression analysis to test the impact of financial shocks on the development of open economy.The empirical analysis shows that: first,the external financial shock will have an impact on the development of the open economy,and the main negative impact;second,the impact of the external financial shock on the development of the open economy has heterogeneous characteristics,third,the impact of external financial shocks on the development of open economy has the characteristics of stages,that is,the more significant short-term impact and the deep-level medium-long-term impact coexist;Fourth,the level of open economic development to a certain extent determines the extent to which the economy can be affected by external financial shocks.In the part of exploring the realistic approach,according to the theoretical and empirical analysis,first of all,the short-term countermeasures of the open economy to deal with external financial shocks are proposed,we should not only give full play to the coordination of monetary and fiscal policies to provide strong policy support for the normal development of the open economy,but also adopt policies directly aimed at maintaining financial stability.Secondly,it puts forward a medium-and long-term strategy,taking the prevention and resolution of financial risks as a systematic project in the process of open economic development,and taking the steady and orderly advancement of financial liberalization as an important strategic grasp,we will adhere to the overall development strategy of opening up in an all-round way and continue to strengthen the "toughness" and "flexibility" of the open economic system,so as to push for higher-level,higher-level and more effective opening-up.The full text has used the standard research method,the theory analysis method,the demonstration research method,has formed three aspects innovation.In the aspect of theory innovation,based on the logic that history is consistent with logic and theory is combined with reality,the open economy development contains multiple dimensions such as stability,openness and order.At the level of research paradigm,based on the analysis paradigm of "Impact-transmission mechanism" and the multiple dimensions of open economic development,a progressive research framework is constructed.At the empirical level,FSI and OEI,which are the core indicators of this research framework,are constructed to fully explain the impact of financial shocks originating from the outside of sample economies on the development of open economies.In a word,the development of open economy is still an evolving process.Only by forming a more comprehensive and in-depth understanding from more dimensions can we achieve the goal that theory better serves practice,and thus promote the realization of a higher level of open economic development.This is the thread running through the whole paper.