The Empirical Analysis on the Relationship between Financial Development and Economic Growth in the Central Region in Shaanxi Province

Both the theoretical and empirical analysis have proved that the financial development has inherent related mechanism with the economic growth.But,when it comes to the county-level economy,the relationship between financial development and economic growth still needs to be studied.So,based on the data from 1990 to 2003,this paper has taken the region of Guanzhong in Shaanxi Province for example.The result of the economic model and Granger Causality Test indicates that there is strong negative relevant relations between the true rate of interest and county-level economic growth,so as the financial developing index;and individual causality between financial development and economic growth.To be exactly,the latter is mainly driven by the former,and the latter hasn′t played an unremarkable role in the county-level economy.It is obvious that there is financial repression in the region of Guanzhong.Therefore, we should take measures to enhance the role of finance toward economic growth from the quantity expanding and the structure optimizing.