A Study On The Impact Of Real Sector Leverage On Macroeconomy

The impact of real sector leverage on the macro economy has been widely concerned by government departments and society.Excessive leverage ratio can overdraw the potential for economic growth.Once the real sector poses risks,the fragility of the financial system can amplify such risks.The high leverage risks of the real sector,combined with the high contagion and nonlinear impact of financial risk,will have adverse effects on economic growth.In recent years,affected by multiple factors such as the pandemic and geopolitical conflicts,the world economy has slowed down,and the debt risks of major economies with high real sector leverage have been further exacerbated.At the same time,China’s economic development is facing triple pressures of demand contraction,supply shocks,and weakened expectations,and there are frequent occurrences of financial market debt defaults and bank failures,increasing risks in the economic and financial fields,the interaction between financial risks and real sector leverage risks has led to insufficient economic growth momentum.Clarifying the relationship between real sector leverage and the macro economy in the new era,grasping the balance between real sector leverage and the macro economy,is of great practical and theoretical significance for effectively implementing the CPC’s strategic plans of "improving macroeconomic governance,establishing a modern financial and taxation system",promoting the modernization of the national governance system and governance capacity,and realizing high-quality economic development under the background of the "dual circulation."This article focuses on the management of leverage risk,using real sector leverage as the research object and employing a research framework consisting of "theoretical analysis-empirical examination-empirical verification-policy recommendations".Firstly,relevant literature on real sector leverage and macroeconomics is reviewed,and related theories are expounded upon.Secondly,using cross-national panel data as a sample,the degree and mechanism of real sector leverage’s impact on the macro economy are empirically verified.Thirdly,the financial stability index is introduced to further explore the moderating and threshold effects of financial stability on the relationship between real sector leverage and the macro economy.Finally,relevant policy recommendations are proposed for optimizing real sector leverage.The specific content is as follows:Firstly,theoretical analysis is conducted on the impact of real sector leverage on the macro economy.After describing the research background and significance of the paper,defining the concepts of real sector leverage and macro economy,summarizing relevant literature on real sector leverage and macroeconomics from domestic and international sources,and outlining the research content and methods of this paper,the theoretical mechanisms of the impact of real sector leverage on the macro economy are analyzed and explored from the perspectives of economic quantity,economic quality,and economic efficiency,based on asset price bubble theory,financial accelerator theory,and budget soft constraint theory.Secondly,a realistic examination is conducted on the evolution of real sector leverage in China.From a macro perspective,China’s real leverage has gone through five stages: "steady increase of leverage" "steady decrease of leverage" "rapid increase of leverage" " proactive deleveraging" and "stabilization of leverage.From a micro perspective,the overall level of household leverage in China is not high,corporate leverage ratio is at a historical high,and government leverage is highly differentiated internally.Compared with other major economies in the world,China’s real sector leverage has increased rapidly,and corporate leverage risk has become the main risk point of real sector leverage.In terms of influencing factors,profound changes in the world pattern,the transformation and upgrading of China’s economic structure,and the shift in the focus of macroeconomic regulation have all led to the rise of real sector leverage.In terms of risk assessment,the debt risk caused by high leverage will overdraw the potential for economic growth,increase the risk of the financial system,and exacerbate distortions in resource allocation.Thirdly,empirical testing on the impact of real sector leverage on macroeconomic performance.Based on theoretical analysis of real sector leverage and macroeconomic performance,using cross-country panel data as the research sample,a variety of econometric methods including generalized method of moments(GMM),dynamic panel threshold model,mediation effect model,moderation effect model,and instrumental variable model were comprehensively used to empirically test the degree and mechanism of the impact of real sector leverage on macroeconomic performance,as well as the moderation effect and threshold effect of financial stability on their relationship.The results show that:(1)Regarding the degree of the impact of real sector leverage on economic growth,there exists a "inverted U-shaped" relationship between real sector leverage and economic growth.The increase in real sector leverage initially promotes economic growth,but excessive leverage will have a negative impact on the economy beyond a certain level,and the "turning points" of the impact of leverage on economic growth vary across different real sectors.Household leverage,corporate leverage,and government leverage affect economic growth through the "consumption" channel,"investment" channel,and "government spending" channel,respectively.The enhancement of financial stability can amplify the promoting effect of real sector leverage on economic growth.(2)Regarding the degree of the impact of real sector leverage on economic fluctuations,the increase in real sector leverage will exacerbate economic fluctuations.In terms of different sectors,the increase in household leverage and corporate leverage will aggravate economic fluctuations,while the increase in government leverage can suppress economic fluctuations.From the perspective of different economies,the negative impact of macro leverage on economic fluctuations is greater in developed economies than in emerging economies.After introducing the financial stability index,it is found that financial stability has a significant threshold effect on economic fluctuations.When the level of financial stability is high,the negative impact of the increase in real sector leverage on economic fluctuations is smaller.(3)Regarding the degree of the impact of real sector leverage on economic efficiency,there exists a significant "inverted U-shaped" nonlinear relationship between household leverage,corporate leverage and economic efficiency.There is a unidirectional linear relationship between government leverage and economic efficiency,the increase in government leverage can directly promote the improvement of economic efficiency.Mechanism testing shows that household leverage,corporate leverage,and government leverage can affect economic efficiency through the "human capital" channel,"research and development expenditure" channel,and "education expenditure" channel,respectively.After introducing the financial stability index,it is found that the increase in financial stability can directly promote the growth of economic efficiency,and positively moderate the relationship between real sector leverage and economic efficiency.Fourthly,corresponding countermeasures and suggestions are proposed to optimize the leverage of real sector.Based on theoretical analysis and empirical verification,countermeasures and suggestions are proposed for optimizing the real sector leverage in China,which include optimizing the macro monetary policy environment,improving the stability of the financial system,and promoting the supply-side structural reform of the real sector.Firstly,the monetary policy framework should be improved.This includes optimizing the monetary policy objectives to improve their effectiveness and guidance,innovating monetary policy tools to enhance the precision and flexibility of monetary policy,and ensuring smooth transmission of monetary policy to improve the market pricing ability of interest rates and exchange rates.Secondly,the financial regulatory system should be improved.This includes strengthening macro-prudential supervision to enhance the overall stability of the financial system,refining microprudential supervision to strengthen the coordination mechanism of financial regulation,as well as enriching the supply of financial products to improve the inclusiveness and availability of financial resources.Finally,the supply-side structural reform of the real sector should be promoted.From the perspective of the household sector,active macroeconomic control measures should be taken to increase household income,guide rational investment and consumption,and prevent and resolve leverage risks from the income and expenditure sides.From the perspective of the enterprise sector,marketoriented reform of state-owned enterprises should be deepened to achieve the goal of deleveraging,the investment and financing linkage mode should be improved to help private enterprises stabilize their leverage.From the perspective of the government sector,top-level design should be strengthened,the operation of local financing platforms should be standardized,and supervision of local government debt should be strengthened to improve the efficiency of leverage.