Abstract: The implementation of positive fiscal policy makes local governments accumulate a certain amount of debt, while the shadow banking supervision related to implicit debt is relatively inadequate to a certain extent, increasing the debt risk of local governments. Based on the relevant economic data from 2002 to 2016, this paper establishes a VAR model to analyze the dynamic relationship among shadow banks, local government debt and economic growth. Research results show that there is a long-term equilibrium relationship among shadow banks, local government debt and economic growth, and economic growth plays a significant role in promoting the size of shadow banks and local government debt; local government debt can significantly promote economic growth and the size of shadow banks, but shadow banks will play a limited role in promoting economic growth and the size of local government debt. Therefore, we should pay attention to the efficiency of economic growth, regulate the scale of implicit debt of local governments, and guard against shadow banking risks.

Key words: shadow banking, local government, debt, economic growth