Research on the Impact of Financial Innovation on Macroeconomic Volatility

Abstract

Since the reform and opening up,China's economic and technological level has been significantly improved. For a long time, the Chinese economy has been in a stable and upward trend. With the arrival of the "Internet plus" era, the impact of innovation on economy and finance has risen to a new level. After the opening of the financial market, there was immediately what we are now familiar with financial risks and innovation, and financial innovation is aimed at reducing financial risks. According to the theory of economic cycle fluctuations, there are many factors that lead to macroeconomic fluctuations, including the total demand level such as consumption and investment, as well as the total supply level such as technological progress. With the continuous advancement of economic globalization, financial innovation, and financial integration, while financial markets bring economic profits, they inevitably bring systemic financial risks, which in turn affect the operation of the macro economy and seriously lead to financial crises. Only by mastering more economic operation information, having stronger judgment on future economic trends, and communicating more effectively with the market, can the efficiency of macroeconomic regulation be improved. This article studies the impact of financial innovation on macroeconomic fluctuations.