Capital Market in the Savings-Investment Conversion: An Economic Analysis from a Functional Perspective

Author: Ying Zhanyu
Publisher:
Publish Date: 2004-12-01
Features: This book attempts to conduct a brand-new theoretical exploration of the existence and development of capital markets in a market economy by applying the cutting-edge achievements of modern financial theory. The book first analyzes the general process of savings-investment transformation, finding that although the development of capital markets has brought certain qualitative changes to the transformation mechanism, in terms of scale, they have always been in a secondary position compared to financial intermediaries like banks. Subsequently, using the analytical paradigm of functional finance theory, the book examines the relationship between capital markets and the following four aspects: liquidity provision, risk allocation optimization, information processing, and the mitigation of incentive problems. It preliminarily constructs a brand-new analytical framework and conducts a systematic and profound study of the numerous supportive functions of capital markets in the savings-investment transformation process. Finally, combining China's practice, the book offers some theoretical reflections on China's capital markets from a functional perspective.