Author(s): Ran Wei

Abstract: In the middle and late of last century, the world economy shows indication that developed from real to virtual. The status and share of virtual economy in modern economy are rising constantly. How to make virtual economy to serve real economy effectively is an important issue that the international community pays attention to. China's economy is under influence of the tide of internationalization. The virtual economy has been expanding rapidly in recent years, while the surface is satisfactory and the essence is worrying. In combination with actual situation in China, this paper studies the relationship between virtual economy and real economy in China by vector autoregressive method. The results show that with the development of virtual economy, its influence on the structure of real economy will be stronger and stronger, while the promotion to the growth of real economy will be smaller and smaller. The virtual economy of China has a considerable crowding out effect on real economy.

Keywords: Real Economy, Virtual Economy, Vector Autoregression.

Article Info: Received: 08 Nov 2020; Received in revised form: 16 Dec 2020; Accepted: 25 Dec 2020; Available online: 30 Dec 2020

DOI: 10.22161/ijels.56.67