Research On The Impact Of Household Debt On Economic Growth In China

Along with the family finance as an independent subject has gradually become the focus of many scholars at home and abroad,people’s attention to the family debt is increasing.As an important social sector,the family plays a very important role in economic activities and development.In particular,household debt can affect the quality and level of a family’s life.The global financial crisis broke out in 2008 was a wake-up call for all countries,and people paid attention to the deep reasons behind the financial crisis.In recent years,China’s economy has developed rapidly.Household debt levels are rising as a result of greater integration and strength into the global economy.Therefore,household debt has become the focus of the research.Based on this,this paper will discuss the impact of household debt on economic growth and put forward suggestions bonding with the actual situation.This paper selects the macro economic data of 2001-2018.Firstly,descriptive statistical method is used to analyze the status quo of household debt,leverage ratio and economic growth in China.Secondly,vector error correction model(VECM)is established,and the impact of household debt on economic growth in China is analyzed through a series of test methods such as granger causality.The conclusions of this paper include: China’s household debt mainly experienced a blowout growth-slow and steady growth-rapid growth-steady growth stage.The relative size and growth of household debt are basically consistent with the change of total amount,showing a trend of continuous growth,while the solvency of households is also improving steadily.There is a long-term equilibrium and stable relationship between household debt,consumption level and GDP.Household debt level is negatively correlated with GDP.Every 1% increase in household debt will reduce GDP by 0.59%.Household debt is the granger cause of the change of economic growth.Household debt is the granger cause of consumption level.GDP and consumption level are also granger causes of household debt.In the short run,household debt has a positive effect on consumption level and GDP.And household debt is more affected by GDP,while GDP is most affected by consumption level and least affected by household debt.Finally,this paper puts forward some suggestions on the impact of household debt on economic growth from three perspectives.The government should pay more attention to the development of household debt,ensure a reasonable increase in the scale of household debt,and control and guide related risks caused by household debt problems.Financial institutions need to promote the construction of financial markets and create a healthy financial environment.Households themselves should raise their awareness of risk prevention of household debt,strengthen risk management,and enhance their ability to resist internal and external risks.