An Empirical Analysis of China's Credit Distribution Impact on Consumption and Economic Growth under Financial Crisis

With the global financial crisis, China's economic growth has been confronting with a severe challenge since 2008. From the monetary policy transmission mechanism, this paper analyzes the impact of credit distribution on consumption and economic growth using econometric methods. Through unit root test and co integration test, a long-term stability co integration relationship between credit distribution and consumption has been found and it also shows that the changes in credit distribution are very sensitive to consumer spending. When credit distribution changes every 1 percent, consumer spending will change 0.8122 percent in the same direction. From the estimated Error Correct Model, it finds that long-term impact of credit distribution is greater than the short-term, so the long-term credit policy is more effective. The study finds that the growth in consumer spending has a significant contribution to economic growth throuth the analysis of consumption and the economic. Finally, the article suggests that a long-term credit distribution policy to deal with the financial crisis should be established and we can achieve the goal of "domestic demand expanding and economic growth".