What Is the Wealth Effect?

The Wealth Effect is a new concept proposed in the development of modern society. It means that after a certain amount of accumulated stock reaches a certain scale, it will inevitably have a transmission effect or a control effect on related fields.

Wealth effect

Because wealth itself is plural, for example, it is divided into material wealth and spiritual wealth, so the wealth effect has a narrow meaning.

The broader wealth effect refers to a broader concept that encompasses all wealth, both materially and spiritually. The material that can satisfy your various production and life needs is wealth; what spiritually makes you happy and comfortable is wealth. The "wealth" of the 1950s was passion: Chinese sons and daughters were full of lofty sentiments and sing, and money was an unnecessary bond! The "wealth" of the 1970s was a struggle: fighting a fiery sky, and money was a battlefield to exercise awareness! 80s "Wealth" is change: Practice is the criterion for testing truth, and money squeezes into the hard truth of development! The "wealth" of the 1990s is a combination: China in its busy development is creating, changing, experimenting, combining Elements of liberation, money is the symbol of the combination! The richest man in the world

Wealth includes two forms:

Factors Restricting Wealth Effect of Chinese Stock Market:

1. The size of the stock market limits the breadth of the wealth effect.

When the central bank adopts an expansionary monetary policy,

The "wealth effect" theory states that

Since so many countries have benefited from immigration, why do more and more countries restrict immigration? Because immigrants are both creators and consumers of wealth, they also affect the resources, environment, infrastructure, and employment of the immigrants. Whether immigrants are welcome depends on the following aspects:

First, if the wealth creation ability of the immigrant is greater than his wealth consumption ability, then we can call him a surplus provider of products, which is also a net contributor to regional wealth. On the contrary, immigrants are net consumers of wealth in the place of immigration-only when this country faces insufficient demand and immigrants carry sufficient monetary assets, immigration of net wealth consumers is beneficial.

Second, even the providers of surplus products depend on whether the productivity of these new immigrants is higher than the population of the immigrants.

However, research shows that the migration of immigrants does not significantly increase the unemployment rate in the importing countries due to the staggered talent employment structure. Migrants may also increase employment opportunities in their host countries by promoting international trade.

Through research, I think that at least there is no necessary correlation between the increase in immigration and the unemployment rate. And another empirical statistical analysis of 15 European countries from 1991 to 1995 shows that every 1 percentage point increase in the population of a country through immigration imports will drive its GDP to increase by 1.25% -1.5%.

In summary, both historical and theoretical studies have shown that immigration, for the most part, means an increase in wealth. in spite of

Except during the historical period when the population pressure caused by the economic depression and other reasons is large, generally speaking, the impact of immigration on the emigration country is not conducive to wealth growth in the long run.

After the "Great Geographical Discovery" at the end of the 15th century and the beginning of the 16th century, Spain, Portugal, the Netherlands, the United Kingdom and other countries have established colonies around the world and migrated there in large numbers.

Empirical research proves that the financial expenditures of many suzerain nations in the colonies are no less than the fiscal revenues derived from them. As far as trade revenue is concerned, the close connection with the colonial economy has indeed opened up the source of raw materials and commodity markets for the domestic market, and as a result has made huge trade profits. However, in terms of long-term immigration factors, especially when the above-mentioned colonies were successively lost, completely localized immigrants basically have no wealth significance to the original host country.

There is no doubt that more than 60 million immigrants who have migrated from Spain, Portugal, the Netherlands, the United Kingdom, and France have created economic prosperity in most countries in Australia, New Zealand, South Africa, the United States, Canada, and South America. The unavoidable loss of wealth in the economy of the country in which it originally resided leaves only a few cultural and blood-related implication.

Cases in the past that forced population migration on their own initiative include the mistaken eviction of Jews in Spanish history, and later the Moors. The persecution of the German Nazis also caused many excellent Jews to migrate to the United States and other countries. Adverse.

For immigrant-exporting countries, the real benefits are more than the so-called immigrants' remittance income to the exporting country. According to World Bank statistics, remittances received by developing countries in 2001 were US $ 72.3 billion, accounting for 1.3% of their combined GDP, and 42% of total foreign direct investment in developing countries. The above study found only one aspect of immigration remittances, and did not compare the funds carried by investment immigrants and the wealth of technology carried by skilled immigrants.

As far as China is concerned, in recent years, the accumulated wealth that has been lost only with so-called investment immigration has exceeded $ 50 billion.

Unlike Mexico and other countries, Chinese immigrants cannot reduce the pressure on their own population. Because of the 108 million Mexican-born people, about 8 million now live in the United Statesclose to 8% of the Mexican populationnot only a huge total, but also labor-based. For countries like China and India, the situation is completely different: the truly surplus labor population cannot be exported due to the restrictions of the immigration laws of developed countries; severely scarce high-tech talents and wealthy classes carrying wealth are directed to the developed countries. The mainstream of immigration.

China has a huge population. Although 30 to 40 million immigrants are not a small number, compared to a large country with a population of 1.3 billion, the proportion is actually very low. It is just that China s open economic ties are not enough to have a significant negative impact on its wealth as European populations migrated to colonies.

In short, in most cases, population migration is conducive to the optimal allocation of global production factors and promotes the increase of human wealth. However, for a local regional economy, population removal itself is the loss of production factors, and population migration itself is the increase of production factors. Therefore, in the long run, population migration is more conducive to the wealth growth of the population importing countries, but not to the wealth increase of the population exporting countries.

For developed countries, the employment squeeze effect of immigrants should not be exaggerated and too many immigration policy barriers should be set up; for developing countries, the wealth loss of population output caused by so-called venture capital immigration, skilled immigration, and overseas detention of overseas students is far Much larger than the meager remittance income, the export structure of immigrants should be adjusted to encourage labor exports and retain technology and capital carriers.