The Relationship Between Leverage Ratio Change and Economic Growth Rate in That Development of Financial Market

Abstract

The relationship between the change of leverage ratio and economic growth rate in financial markets has always been the focus of economists, policy makers and market participants. The goal of this paper is to deeply study how the fluctuation of leverage ratio affects the economic growth rate and explore the complex mechanism of this relationship. Based on the previous theoretical research on leverage ratio and economic growth, this paper shows that excessive financial leverage ratio will not only lead to economic decline, but also cause financial turmoil through the Pearson correlation research between financial leverage ratio and economic growth. The change of leverage ratio has an important impact on economic growth, but this impact is diversified and complex. A deep understanding of the relationship between leverage ratio and economy is very important for maintaining the stability of financial markets and sustainable economic growth, especially in the ever-changing global financial environment. This requires the joint efforts of policy makers, regulators and market participants to ensure the effectiveness and sustainability of leverage ratio management.