Research On The Influence Of Chongqing Financial Development On Economic Growth

In the past decades of development,Chongqing has handed in satisfactory answers both in economy and finance.Nowadays,the international change constantly like cloud and wave,and the domestic economy is also in the important stage of economic reform.In addition,the impact of trade war and COVID-19 will be on the history and the level of Chongqing’s financial and economic development.The direction and form of interaction between them will be discussed.The possible solutions can be helpful for Chongqing to formulate and implement more effective policies and regulations,and promote Chongqing’s financial and economic development to a new level.Firstly,this paper combs the relevant research results at home and abroad.The existing research results have less regional research.Considering the different development models between the east and the west of China,the research at the macro level may not be in line with the local situation of Chongqing.Based on this consideration,on the basis of previous studies,this paper first analyzes the current situation and historical characteristics of economic and financial development in Chongqing.Then,the famous Pagano model theory is used to construct the corresponding economic and financial indicators,combined with the generalized additive model(GAM)to fit the possible nonlinear forms reflected by the binary scatter diagram of variables,so as to study the mechanism of financial development affecting economic growth.The empirical results show that the financial correlation rate and savings rate have a nonlinear effect on the economic growth rate,The economic growth rate first decreases and then increases with the increase of financial correlation rate,and first increases and then decreases with the increase of savings rate.In addition,the research process found that gam model has better fitting effect than ordinary linear regression,and can better describe the relationship between finance and economy.Then the relationship between them is discussed based on vector autoregressive(VAR)model.ADF test shows that the constructed index is first-order single integration.The cointegration test on this basis shows that the index constructed in this paper has an equilibrium relationship in the long run.The error correction model(ECM)is further constructed according to the cointegration equation to describe the adjustment strength and direction when the variables deviate from the equilibrium state in the short term.The Granger causality test reveals that there is Granger causality between finance and economy in Chongqing in a statistical sense,Impulse response analysis and variance decomposition study the response of economic growth to fluctuations in various sectors of the financial industry.It can be seen that the deposit and loan level of financial institutions and their intermediary efficiency account for the main part of the impact of Finance on the economy.Finally,according to the empirical results,this paper puts forward some policy suggestions,such as vigorously developing finance and economy to strengthen their mutual promotion,improving the service system of financial institutions,ensuring the safety of financial operation and paying attention to the reasonable adjustment of financial structure.