Financial Development and Economic Growth: Evidence from China in 1978-2009
(2011) EKHR22 20111Department of Economic History
- Abstract
- This thesis examines the relationship between financial development and economic growth. By reviewing previous theories and empirical studies about financial development and economic growth and financial development process in China, I assumed that there is a positive relationship between financial development and economic growth in China case. Then I use time series annual data from 1978 to 2009 to set up a short-term model and long-term model. By running causality test and regression, I find that in the short term, if financial sectors in China develop well and provide more monetary services for economic activities, it will promote Chinese economic growth. At the same time, if Chinese economy develops very well, financial sectors will... (More)
- This thesis examines the relationship between financial development and economic growth. By reviewing previous theories and empirical studies about financial development and economic growth and financial development process in China, I assumed that there is a positive relationship between financial development and economic growth in China case. Then I use time series annual data from 1978 to 2009 to set up a short-term model and long-term model. By running causality test and regression, I find that in the short term, if financial sectors in China develop well and provide more monetary services for economic activities, it will promote Chinese economic growth. At the same time, if Chinese economy develops very well, financial sectors will get benefit from the good economic environment. But if banks provide too much loan, the economic growth rate will slow down. In the long term, there is not really obvious positive effect between economic growth and financial development in China case as expected. But efficient bank loans are helpful for promoting economic growth. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/1977969
- author
- Liu, Yichen LU
- supervisor
- organization
- course
- EKHR22 20111
- year
- 2011
- type
- H2 - Master's Degree (Two Years)
- subject
- keywords
- Financial Development, Economic Growth, China, Time Series analysis
- language
- English
- id
- 1977969
- date added to LUP
- 2011-06-21 10:48:40
- date last changed
- 2011-06-21 10:48:40
@misc{1977969, abstract = {{This thesis examines the relationship between financial development and economic growth. By reviewing previous theories and empirical studies about financial development and economic growth and financial development process in China, I assumed that there is a positive relationship between financial development and economic growth in China case. Then I use time series annual data from 1978 to 2009 to set up a short-term model and long-term model. By running causality test and regression, I find that in the short term, if financial sectors in China develop well and provide more monetary services for economic activities, it will promote Chinese economic growth. At the same time, if Chinese economy develops very well, financial sectors will get benefit from the good economic environment. But if banks provide too much loan, the economic growth rate will slow down. In the long term, there is not really obvious positive effect between economic growth and financial development in China case as expected. But efficient bank loans are helpful for promoting economic growth.}}, author = {{Liu, Yichen}}, language = {{eng}}, note = {{Student Paper}}, title = {{Financial Development and Economic Growth: Evidence from China in 1978-2009}}, year = {{2011}}, }