Research On The Determinants And Level Control Of Leverage Ratio In China’s Macroeconomic Leverage Ratio

Research on the so-called macro leverage ratio refers to the ratio of total non-financial sector debt to GDP,including households,non-financial enterprises and governments.In recent years,China’s non-financial debt balance / GDP has risen rapidly by more than 250 per cent.The high leverage ratio causes the government and the academia and so on widespread worry,"deleveraging" becomes our country an important economic task.Macro leverage is generally high in the world’s major developed economies.The factors of high leverage involve many factors,and many literatures only emphasize one aspect separately.In this paper,a dynamic model of macro leverage ratio is established,in which the multiple determinants of macro leverage ratio are integrated,including economic growth rate,interest rate level,capital-output ratio,capital depreciation rate,enterprise asset-liability ratio(financing structure).Secondly,combining Var model,granger causality test,panel data random effect and fixed effect,the applicability of the model in China is tested,and the actual impact of different factors on macro leverage ratio is verified.Thirdly,we estimate the path of macro leverage ratio in different economic situations by numerical simulation.The simulation found that if we do not change the long-term financing and investment pattern and the economic growth pattern in the past,and do not take appropriate policy measures,China’s macro-leverage ratio will likely exceed 300%.Based on the analysis of the model,the paper finally puts forward policy recommendations,including strengthening equity financing,improving the financing structure,enhancing technological progress and human capital investment to promote economic growth,thus reduces our country’s macroscopic leverage ratio and so on.