Research On Impacts Of Bank Credit On Economic Fluctuation In China

At present,the world economy has seen many uncertainties under the impact of the new crown epidemic,the global economy is suffering the worst impact since the Great Depression in 1929,and some countries have fallen into an unprecedented recession.At the end of 2021,China’s GDP exceeded 110 trillion yuan,with a growth rate of 8.1%,an increase of nearly 6 percentage points over 2020,and basically recovered to the pre-epidemic level.The 2021 Government Work Report points out that a prudent monetary policy should be flexible,precise,reasonable and moderate.The growth rate of money supply and social financing scale basically matches the nominal economic growth rate,further solves the financing problems of small and medium-sized enterprises,guides commercial banks to expand credit loans,continues to increase the number of first-time lenders,and promotes loans with repayment,so that more funds flow to scientific and technological innovation and green development,and more to small and micro enterprises,individual industrial and commercial households,and new agricultural business entities.Targeted support was given to industries affected by the epidemic,and loans to large commercial banks to benefit small and micro enterprises increased by more than 30%.In the context of optimizing bank credit delivery and alleviating economic fluctuations,it is of certain theoretical and practical significance to fully study the impact of bank credit on economic fluctuations.On the basis of summarizing the existing literature research,this paper first analyzes the mechanism of the impact of bank credit on economic fluctuations;secondly,from the current situation of bank credit and economic fluctuations in China,the impact of total credit,credit structure and credit interest rate on economic fluctuations is analyzed;third,based on the annual panel data of 31 provincial regions from 2005 to 2020,the impact of bank credit on economic fluctuations is empirically analyzed by selecting relevant variables to construct a dynamic panel model.The results show that the increase in the scale of credit can alleviate the economic downturn cycle to a certain extent,this is because when banks increase the supply of credit,the difficulty of obtaining financing in the real economy decreases,and more funds can be used for economic activities,thereby reducing the downside risk of the economy;the proportion of medium-and long-term loans is higher,the economic operation will be more stable,and the risk of economic fluctuations is small,which is because medium-and long-term loans are more conducive to long-term investment by enterprises,alleviating their short-term operating pressure,and promoting the renewal of production equipment and technological innovation of enterprises.Thus alleviating the risk of economic fluctuations;reducing the interest rate of bank loans can reduce the risk of the economic downturn cycle to a certain extent,this is because when the bank loan interest rate falls,the financing cost of social investment and consumption falls,and rational economic people are more inclined to invest and consume activities,thereby reducing the risk of economic downturn.Finally,according to the research results,five suggestions are put forward to promote the steady growth of the economy:continuously improve the central bank’s monetary and credit policy system;promote the precise force of credit delivery;promote the optimization of the credit structure of commercial banks;steadily promote the reform of interest rate marketization;and keep the bottom line of no systemic risk.