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Financial Development、Exogenous Shock and Economic Volatility——Study based on panel data of Chinese provinces |
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Abstract By utilizing panel data of 28 provinces in China during 1978-2007,we test the relationship between financial development and volatility of real GDP per capita as well as real fixed investment per capita,and we find that financial development mitigate the effects of exogenous shock on real GDP per capita and real fixed investment per capita greatly, and decrease the sensitivity of economy to exogenous volatility in China effectively. In addition, we also find that the improvement of financial system efficiency is more effective than the expansion of financial system scale in mitigating the effects of exogenous shock on real GDP per capita and real fixed investment per capita.
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Received: 14 September 2010
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