Further discussion on the relationship between financial development and economic growth under the background of digital economy

Abstract

In the past decade, the rapid development of digital economy has brought innovative development to finance. This change will not only affect the financial system, but also affect economic growth. In this context, it is of great theoretical and practical significance to re explore the relationship between financial development and economic growth. This paper first makes a theoretical discussion on the relationship between existing financial development and economic growth, then studies the deep-seated relationship between financial development and economic growth under the background of digital economy, and finally constructs an econometric model for empirical analysis by using the quarterly data of GDP, financial asset ratio m2 and total loans to total deposits of financial institutions from 2014 to 2021. The results show that under the background of digital economy, The support of digital technology improves financial efficiency, and financial development can well promote economic growth, but at the same time, disorderly financial development will also hinder economic growth; Financial development and economic growth promote each other. In this relationship, economic growth plays a leading role, that is, financial development comes from the needs of economic growth.