The Empirical Research On The Threshold Effect Between The Financial Restraint And Resident Consumption

In China, limited by the level of economic development and the overall technical conditions, a long time mainly to promote economic growth through exports of government-led investment and low-value-added products. Although economic growth rapidly, the inefficient model is unsustainable. In addition, the 18 th CPC National Congress raised "accelerate the improvement of the socialist market economic system and accelerate the transformation of economic development". Investment, exports and consumption are considered economic growth troika, To change the current situation of China’s economy over-reliance on investment and exports, we can focus from boosting domestic demand and increase residents consumption.Since the beginning of 1980, The China’s GDP growth rapidly, while household consumption growth was unsatisfactory. Residents consumption rate falls from 50.8% in1990 to 36.9% in 2012.This paper argues that the policy implemented by the government financial restraint is one of the inner reasons. In essence, the government financial restraint create rent opportunities for finance and production departments. The transfer and redistribution of rent, from the household sector consumption residents,will repress residents consumption. Financial restraint inhibit the way the consumer can be divided into direct and indirect repression. Direct repression refers to rents makes transfer of income from direct losses, respectively in the bank deposit and lending market and the stock market. Lower deposit rates makes household sector’s income loss in the bank deposit and lending market. In addition, china’s stock market since its birth natural has the function of financing for the state-owned enterprise. There are some unreasonable phenomenon, including overflow high price publishing, low threshold to refinance and so on. The Stockholders’ money into the stock market far higher than return, but listed companies and brokerage etc benefit from it. Indirect repression refers to the rent in the process of redistribution caused the residents income inequality.according to the law of diminishing marginal utility, income inequality represses residents’ consumption. Therefore, the implementation of financial restraint policy of residents consumption repression effect. However, according to Hellmann and other scholars research on the financial restraint theory. Financial restraint policy by creating rent opportunities to promote the development of the financial department and production department, and power for the economic growth of developing countries.Then economic growth promoted the steady improvement in people’s income andconsumption levels continue to improve. Hence, the impact of financial restraint on the residents consumption there may be a threshold effect. That when the financial restraint intensity in a certain regime, financial restraint are negatively related with the residents consumption; When the financial restraint intensity in another regime, financial restraint relationship with residents consumption were positively correlated.In this paper, based on theory of financial restraint theory as the core, at the same time reference Keynes consumption function theory to study consumption problem.Firstly, by comparing the difference between financial restraint and financial repression in China is to determine the starting point of financial restraint policy implementation.Secondly, combining with China’s current national conditions, Selecting the seven indicators from the bank deposit and lending market, the stock market and foreign exchange market, to build index of financial restraint by principal component analysis.Thirdly, Using threshold model to study the financial restraint of the threshold effect of the residents consumption in China. The result showed threshold effect is exists. When the intensity of financial restraint policy is higher than the threshold value of 5.92, the implementation of financial restraint policy repress the growth of residents consumption;otherwise, it play a positive role. Lastly,Combining with the reality of our country, this paper explains the reasons of the existence of the threshold effect and puts forward countermeasures and Suggestions for how to promote residents consumption.