Abstract
From the perspective of principal-agent, the theory of financial acceleration holds that due to the defects of the financial market, external shocks will be amplified by the financial market and accelerate the transmission in the real economy, and the impact on small enterprises is greater than that on large enterprises. According to the theory of financial deceleration, the agency cost caused by financial friction is counter-cyclical, which restrains credit scale to some extent, prevents excessive debt, and thus alleviates external shocks. According to the empirical analysis of panel data of iron and steel enterprises and the existing empirical results of the real estate industry, it is found that there is no financial accelerator effect or financial reducer effect in the field of iron and steel enterprises. China’s financial accelerator is more focused on bubbly assets where growth is expected and continues to be overheated despite policy tightening. That would trigger a bigger debt crisis and greater economic volatility.
Highlights
In 2008, under the influence of national monetary policy control and domestic and foreign situations, the real estate industry once fell into a serious contraction situation
As can be seen from the coefficient of equation (6) and (8), when the real money supply increases by 1 unit, the investment of large iron and steel enterprises decrease by 2.28 units
As can be seen from the coefficients in equation (7) and (9), the monetary multiplier decreases by one unit, and the investment of large iron and steel enterprises decreases by 1.54 units
Summary
In 2008, under the influence of national monetary policy control and domestic and foreign situations, the real estate industry once fell into a serious contraction situation. In 2009, under the influence of multiple factors such as loose monetary policy, the real estate market in major cities rose in both quantity and price, and quickly turned from recovery to overheating. The empirical analysis shows that the acceleration effect of monetary policy and finance in China is quite significant in the real estate industry. Material, industrial and other industries, how to use the efficiency of the financial accelerator effect to achieve a balance between economic growth and the prevention of real estate bubbles is what the government must take into account when implementing monetary policy
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