Keywords
Rural residents
Illegal digital finance
DSGE
Submitted : 2026-05-04
Accepted : 2026-05-19
Published : 2026-06-03
Abstract
The digital economy offers both opportunities and challenges for enhancing rural residents’ digital financial literacy. Notably, the spread of illicit digital financial activities has seriously impeded the sound development of rural digital finance. This study integrates illegal digital financial risk prevention into an analysis of rural residents’ digital financial literacy. The results show that their digital financial literacy remains low, the supporting ecosystem is underdeveloped, and risk prevention capacity is insufficient. Further analysis indicates that losses from illicit digital finance transmit shocks through consumption channels. A three-sector DSGE model is therefore constructed to simulate the negative responses of household consumption, credit, and output to such shocks. Higher digital financial literacy is found to accelerate the return to steady state and reduce economic uncertainty. Based on empirical and model-based evidence, this paper proposes policy recommendations: strengthening digital financial education for rural residents, improving the digital financial service system, optimizing relevant laws and policies, and establishing an efficient risk early-warning mechanism.
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