Why Has the Business Cycle in China Become More Stable in the Twenty‐first Century?

摘要

21 21 21 ——GDP CPIGDPCPI :   The purpose of this paper is to answer two questions: first, what are the causes of the stability of the Chinese business cycle in the twenty‐first century? Second, what are the sources of volatility for the Chinese economy in the twenty‐first century? Using statistical analysis and constructing a multi‐equation structural macro‐economic model, we find the answer to the first question depends almost totally on domestic factors, including the stability of domestic demand shock and the automatic stabilization mechanism existing in the credit market. As to the second question, the greatest sources of volatility are foreign and domestic demand shocks, with the former having a greater effect on the volatility of GDP while the latter has a greater effect on the CPI. Another finding is that traditional monetary policy targeting money supply has little effect on the stability of GDP and CPI. One policy suggestion is that a domestic stimulus policy to stabilize aggregate demand is still vital against the background of the global crisis; another is that to get rid of negative impact of globalization upon our economy, we need to rely more on urbanization rather than industrialization and need to re‐adjust the economic roles of different regions within China.View full textDownload full textKeywordsbusiness cycle, globalization, stabilityRelated var addthis_config = { ui_cobrand: "Taylor & Francis Online", services_compact: "citeulike,netvibes,twitter,technorati,delicious,linkedin,facebook,stumbleupon,digg,google,more", pubid: "ra-4dff56cd6bb1830b" }; Add to shortlist Link Permalink http://dx.doi.org/10.1080/02529203.2011.548918