The Optimal Financial Scale And The Optimal Financial Structure

The financial sector plays an increasingly important role in the whole society.The development of financial sector includes not only the expansion but also the internal structure transition.The total financial assets of our country have been growing up,the proportion of indirect financing has been declining year by year.However,there still is a big gap between our country and developed countries.The total financial assets of the USA are almost two times of our country,and its proportion of indirect financing is 25 percent lower than our country.Whether financial development will support the real economy or changes in financial structure will generate what kind of effects on the real economy both are crucial problems that need to be solved urgently by our country's decision-making department.This article combines capital and labor,which are two vital input factors,to explore the optimal financial structure by using the neo-classical growth model,and then to analyze the utility function based on the micro perspective from three aspects,financial sector,the real economy sector and government.As the policy-making sector,the government's performance relys on per capita consumption level and the optimal status,from which has deduced that the expansion of the financial sector has a certain extent.In addition,the financial development is not only the expansion of its scale,but also accompanied by the changes of the inner structure.In order to further investigate the changes in financial structure,this paper redefines the financial structure,and use the neoclassical growth model to explore the optimal proportion relations of financial intermediary and financial market.Finally,with the help of Lewis's population flow model,this paper studies the transfer process of financial practitioners from financial intermediaries to financial markets,to illustrate the internal mechanism of the optimal financial structure.It is found that,in this paper,there is an optimal scale and optimal structure in financial development.The expansion of the financial sector has a certain role in promoting the real economy,but this role will weaken if the financial sector continues to expand.Considering the operation cost of the financial sector will increase with the expansion of the scale,it has an optimal balanced status between income and cost,in other words,it is the optimal financial scale.Simultaneously,there is only the optimal financial structure to adapt to it for a specific stage of development,which makes the economic society to get the biggest financial support.