The correlation study based on VAR model between major financial risk indicators and economic growth

Abstract

This paper based on GDP of 1992-2009 year dates and related factors, constructed three risk indicators model of money, bank, asset, analyze correlations between three indicators and GDP growth, which reflected risk in those years. And this paper selected the key factors about economic growth-money index by using linear regression. Established VAR model by using money index and GDP growth, by making per unit test, Co integration, Grange and pulse, which reflected the correlations about some financial index and economic growth in china, forecasted the risk in next year. Instructed that money risk make some pulse power to china economic, but with time disappear, the pulse power disappear. © 2011 Springer-Verlag.