The relationship between finance and economy ?

The relationship between finance and economic development can be expressed as follows: the two are closely linked, mutually integrated and interacting.

Specifically, (1) economic development plays a decisive role in finance, while finance plays a subordinate role and cannot override economic development; while finance serves economic development, it has a great role in promoting economic development, but it may also have some adverse effects and side effects. The decisive role of economic development on finance is centrally manifested in two aspects: firstly, finance arises in the process of the development of the commodity economy and develops along with the development of the commodity economy. Secondly, the different stages of development of the commodity economy have different needs for finance, which determines the structure, stage and level of financial development.

(2) the role of finance in promoting the economy is through the characteristics of financial operations, the basic functions of finance, the operation of financial institutions and the financial industry's own output growth in these four ways: ① through the operation of the financial to provide a variety of conditions for the economic development of the facilitation of the financial operations; ② through the basic functions of finance to provide financial support for economic development; ③ through the operation of financial institutions to improve the efficiency of resource allocation and economic development; ④ through the operation of financial institutions to improve the efficiency of resource allocation and economic development; ④ through the operation of financial institutions to improve the efficiency of economic development. and the efficiency of economic development through the operation of financial institutions; ④ through the financial industry's own output growth directly contribute to economic development.

In economic development, the possible adverse effects of finance are manifested in the imbalance of social supply and demand due to the uncontrolled credit expansion of the financial aggregates; the increase of risk due to the poor financial operation, which will lead to financial crisis once the risk goes out of control; and the creation of financial bubbles due to the over-inflation of credit, which will inflate the virtual capital, stimulate the excessive speculation, and undermine the economic development in three aspects.

Correct understanding of the relationship between finance and economic development, pay full attention to the role of finance in promoting economic development, and actively prevent the adverse impact of finance on the economy. Positioning of finance in the economic development of the due position, so that finance in the process of promoting economic development to obtain their own healthy growth, so as to maximize the service for economic development.