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A Study On Influence Of China's Industrial Structure Changes On Business Cycles

Posted on:2012-02-23Degree:DoctorType:Dissertation
Country:ChinaCandidate:W B LiFull Text:PDF
GTID:1119330368984013Subject:Western economics
Abstract/Summary:PDF Full Text Request
The macroeconomic performance is not only the process of cyclical fluctuations, but also a process of structural changes, there is a close link between industrial structure changes and economic fluctuations, the economy is always associated with industrial structure changes in cyclical fluctuations, economic growth is also associated with industrial structure changes. In the background of economic globalization and regional economic integration, how to smooth economic fluctuations in the process of industrial structure adjustment and upgrading, has became a very real issue for all the countries. Particularly, China's industrial structure is not reasonable, smoothing economic volatility is still a major problem. Therefore, studing macroeconomic volatility from the perspective of industrial structure is contributed to understanding the impacts of structure adjustment on the economic fluctuations and reducing the volatility of the economy during the process of industrial structure changes and upgrading, there is great significance in ahieving the healthy and stable economic growth and sustainable development.Industrial structure changes is an important reason of causing business cycles, industrial structure changes influence the economic cycles through the constant turnover of the leading industry and mobility of elemant between different departments. The transfer of elements between different departments and changes of the status and role in the production process, especially technological changes, make the leading industry change and turnover constantly, in this process industrial structure develope and change constantly, which form the economic cycles. Therefore, promoting elements rational flow and configuration between different sectors, steady and rapid transformation of industrial structure is conducive to slow economic volatility.Based on the historical facts of industrial structure changes and the business cycles, The article reveals the impact of the internal structure changes on the formation of the business cycles. On this basis, using empirical datas of China, I anlyze the correlation between industry structure changes and the economic volatility through the Granger causality test and VAR model. The results indicate that there exists two-way causal relationship between industry structure changs and business cycles, the change of primary industry, secondary industry and tertiary industry is one of the causes of business cycles. Analysis of impulse response function shows that the development of secondary industry is the main driver of China's economic volatility, and the structure changes of tertiary industry has the effect of stabilizing the economy.Structure changes, whether the rationalization of industrial structure or modernization of industrial structure, has a significant influence on stabilizing the business cycles. In pursuit of modernization of industrial structure, a lot of attention should also be paid to the rationalization of industrial structure and focusing on the coordination and the coupling between industries. Therefore, promoting the rationalize and modernization of the industrial structure and playing the force of them will help stabilize the economy.Based on the fact of the microwave trend of the business cycles, by constructing Cobb Douglas production function of manufacturing and services, the article reveals that structural changes from primary and secondary industry to tertiary industry is an important reason for the microwave trend of business cycles. Estimating results show that volatility of total factor productivity at the gross output level in manufacturing is larger than services, and volatility of total factor productivity at value added level in manufacturing is more larger than services from 1978 to 2008, even if the same level of GTFP volatility in the two sectors implies a 69% larger YTFP volatility in manufacturing, This is mainly derived from the difference of production technologies (primary and secondary industries are more dependent on intermediate inputs), variance decomposition shows that the contribution of the industrial structure change to the stability of economic fluctuations is as high as 31% since 1978.
Keywords/Search Tags:Industrial structural changes, Business cycles, Total factor productivity, Stabilization of business cycles
PDF Full Text Request
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