Laos' Financial Development And Economic Growth

At the present stage,China's economy is developing rapidly,and it has rapidly penetrated into the atmosphere of economic globalization.As the main force to achieve economic globalization,financial industry has gradually occupied an important growth point and core position of the national economy.The remarkable growth of national economic strength can not be separated from the support of the financial industry,which makes the development of the financial industry attracted extensive attention of experts and scholars.Based on this,experts and scholars at home and abroad have stepped into the field of the relationship between finance and economic growth.Most famous economists at home and abroad attach great importance to the development of financial industry;d explore its role in economic development and how it supports the rapid progress of the national economy.At present,most of the studies adopt empirical research methods,in which specific research methods are subordinate to empirical research methods,and many other methods are involved in the research process,so that there are some differences in the research results.But on the whole,experts and scholars at home and abroad support the conclusion that the prosperity of financial industry contributes to economic growth.In this paper,through the analysis of financial industry and the summary of economic theory,Laos is selected as the research object.The research mainly involves the data of financial development and economic growth of Laos from 1996 to 2016,and carries out empirical research with specific research methods.Through this study,we find that the long-term economic growth of Laos is accompanied by the sustained development of the financial industry.The cointegration test in this paper verifies that there is an inseparable relationship between the development of financial industry and economic growth.The Granger causality test in this paper verifies that the real GDP growth rate is equal to the ratio of money supply to GDP based on 5%significant level.Based on the significant level of 10%,the real GDP growth rate is equal to the real interest rate.The model test method in this paper verifies that the real interest rate and the money supply in the market play a significant role in promoting economic growth.The results of the analysis put forward some effective suggestions:firstly,we must ensure the improvement of the financial market infrastructure,which will contribute to the steady growth of the financial industry;secondly,the government and enterprises should vigorously promote the diversification of the financial industry in order to promote the improvement of the level of financial services;thirdly,the government regulatory authorities should establish a sound financial policy system.And to speed up the construction of financial market supervision system,which will help to improve the efficiency of financial transactions,thereby improving the regulatory system to ensure fair transactions in the financial market.Finally,we need to stabilize the currency value,prevent the expansion of the scope of inflation,and maintain the stability of the market environment.