The Analysis Of Liquidity Constraint And Consuming Activities Of Chinese Household

At the present stage, to accelerate the establishment of a long-term effective mechanism of expanding consumer demand has become a consensus. In the past more than 30 years, with the rapid growth of economy and resident’s income, the consumption rate of the whole society and citizen consumption rate present a long-term downward trend, nevertheless government consumption rate is relatively stable; We can consider that the descending ratio of citizen consumption directly reduces the whole society consumption and results in insufficiency of domestic effective demand, and domestic consumption demand has became an important problem which restricts the healthy development of national economy. At present, China’s Household Consumption Rate is not only far below the level of developed countries but also below the level of developing countries which close to our country’s level. In terms of the problem of insufficient domestic demand, government has adopted a series of major policy, but it doesn’t achieve the goal of starting consumption and expanding domestic demand. The academia also explains the causes of inadequate household consumption in China from different sides, but scholars have not formed consensus. Based on these practical and theoretical background, the dissertation structures a framework of liquidity constraints which including demographic shifts, income distribution, uncertainty and consumption habits, attempts to make a more comprehensive explanation on the causes of insufficiency of Chinese household consumption from the perspective of liquidity constraint hypothesis, and then to provide the necessary reference basis to establishment of long-term mechanism to expanding consumption demand.Firstly, the dissertation systematically analyzes the theoretical literature and empirical literature on the relationship between liquidity constraints and consumption at home and abroad, which lay theoretical foundation and provide technical support for further research. Secondly, the paper makes a systematic analysis of the characteristics of urban and rural residents’ consumption behavior, and analyzes the factors that affect the urban and rural residents’ consumption from those eight aspects, which include income condition, consumer credit, informal finance, institutional change, uncertainty, demographics, consumption habits and interest rates. Next, based on the evaluation and improvement of the "Campbell and Mankiw" liquidity constraint model, this paper builds static recognition model and dynamic recognition model of rural residents’ liquidity constraints, static recognition model and dynamic recognition model of urban residents’ liquidity constraints respectively; And on the basis of the unit root test of panel data of rural and urban residents, this paper adopts the "fixed effects-instrumental variable method" (FE-Ⅳ) which takes control of the individual and the time effect to identify rural and urban residents liquidity constraint model statically, and utilizes the "system generalized moment estimation method" (System GMM) to identify rural and urban residents liquidity constraint model dynamically.The empirical results demonstrate that the development of the rural informal finance alleviates the liquidity constraints that rural residents confronted previously, and promotes the consumption of rural residents, but income is still the main decisive factor. Current rural residents are not only faced with the traditional natural risk and family internal uncertainty, but also deal with all kinds of market uncertainty that can occur at any time, as well as various institutional uncertainty that accompanies the process of the institutional transition, precautionary motive that caused by these uncertainties directly restricts the expansion of the rural residents’consumption demand. Because the rural residents’consumption habit once formed, it is not easy to change it, and it has a relative stability, which hinders the consumption of rural residents directly. Under the background of traditional "expected zero risk" welfare system gradually disintegrated and the social security system has not yet fully established, the uncertainty caused by system reform of urban residents’ education, employment, health care, pension and housing confronts urban residents with the motivation of strong precautionary savings. To a certain extent, it reduces the urban residents’ marginal propensity to consume. The sensitivity coefficient of all levels of rural residents’ income presents the "inverted u-shaped" trajectory, that is to say, medium-low income and middle-income household are confronted with the most severe liquidity constraints, however, low-income and medium-high income household are faced with low liquidity constraints relatively, high-income household is up against minimum liquidity constraints; Accordingly, the liquidity constraints confronted by different income groups of urban residents also present the "inverted u-shaped trajectory". Consumption habit has significant negative effects on urban and rural residents, and the change of population structure has no significant impact on urban and rural residents’ consumption.Based on the theoretical and empirical test above, the dissertation argues that the basic way to alleviate liquidity constraints and long-term mechanism to expand consumer demand are to set up the mechanism of residents’ income growth, and to enhance sustainable residents’ consumption ability; To perfect the social security system of the nation further, and to improve consumer expectations; To optimize consumption environment, and to improve the conditions of residents’ consumption; To strengthen consumer guide and to promote the quality of residents’ consumption.