Impact of capital market volatility on economic growth - An analysis based on stochastic volatility model

• DOI: 10.1016/j.heliyon.2024.e25679
• Publication Date: 2024-02-06T01:30:50Z
• Authors: Mengmeng Chang; Yuqi Li
• Keywords: Capital deepening; Physical capital; Capital (architecture)

This paper delves into the relationship between volatility of capital market and economic growth within broader framework macro market. By employing Heston stochastic model in tandem with macroeconomic theory, we aim to analyze control problem allocation trajectory macro-capital fluctuations. Our mathematical analysis reveals that influence shifts on growth's varies across different markets due diverse risk levels inherent To validate these findings, embark an empirical econometric tailored nuances China's its operations. exploration yields two primary insights: 1. Distinct components have varying influences growth. 2. The structure market, especially impact development, exhibits imbalances lacks optimal configuration.