Supply-demand of financial asset and China’s economic development: from the perspective of financial assets shortage

ABSTRACT

Why China’s economy growing rapidly under the conditions of long-term financial asset shortage, and what’s the relationship between supply-demand of financial asset and economic development? This paper obtains some conclusions from mathematical model and empirical test analysis. Firstly, shortage of financial assets is the result of adjustment of financial supply and demand, rather than the direct cause of restricting economic development. Secondly, increasing financial assets supply will promote economic growth, and financial asset from China’s banking sector, such as Credit, Bonds, are more effective than capital markets. Thirdly, when financial asset shortages exist, increasing supply can achieve additional growth to enhance economic development.

KEYWORDS:

• Economic development
• financial assets shortage
• supply-demand equilibrium
• additional growth

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This research was supported by The National Social Science Fund of China (19BJY038).