Macroeconomic Fluctuations And Policy Options,from The Perspective Of Financial Deleverage

With the development of modern financial industry,the increasing of the economic individuals' leverage ratio is becoming more and more common,China's macro-leverage level has been rising gradually in recent years.When the economy grows fast,financial leverage increases the source of funding for the economy,enabling it to use less of its own capital to earn more.However,when the macroeconomic continues to decline,high leverage may lead to sharp fluctuations in asset prices,making the balance sheets worse,and even triggering systemic financial risks.In in the background of China's economic growth is facing the transformation from the high-speed growth to high-quality growth,the rapid rise of China's macro-leverage,especially in non-financial enterprises and houeholds sector has aroused widespread concern.To leverage actively and securely,to reduce and defuse regional,Systemic financial risk is one of the important tasks in government economic work at present and even in the future.Therefore,by building a Dynamic Stochastic General Equilibrium(DSGE)model with characteristics of the transition period of China's macro-economic,and study the macro-economic effect of financial deleverage and the choice of macro-control policy under the background of financial deleverage has strong theoretical and practical significance.This paper firstly reviewed the research progress of the DSGE model,leverage and other related research.Based on existing research results,we measured and analyzed China's leverage ratio.By building a simple static general equilibrium model,we analyzed the long-term effects of financial deleverage.Based on the current situation of marco-economic,on the basis of standard new Keynesian DSGE models,the paper imports the heterogeneous household sector,heterogeneous mortgaged property,consumption,price stickiness,capacity utilization rate adjustment costs,investment adjustment costs,the adjustment cost of real estate transactions and some other nominal and real rigidity.In addition,it imports the mortgage constraint mechanism as a financial friction,so that explicitly imports leverage constraints in the model.It also uses the macro and micro data to estimates the parameters of DSGE model by a variety of methods.Then use the DSGE model to systematically analyze the influence of two kinds of deleverage impacts,which from the main macroeconomic variables such as output,interest rates,asset prices,consumption,debt,leverage,capacity utilization,investment,inflation etc.Moreover,it analyzes the causes of influence and the pathways behind it.At the end of the paper,we considers that use control methods,policy communication and coordination to analyze the optimal choice of policy under the background of deleverage.Moreover,we put forward relevant policy suggestions.Leverage ratio and financial deleverage is the backbone that throughout the paper.This paper analyzes the short-term and long-term effects of financial deleverage.This paper also found the optimal monetary policy regulation rules under the background of the financial deleverage.Moreover,it evaluates the effect of policy communication and coordination under the background of the financial deleverage.The main innovative points and conclusions include:First,this paper solved a second stage optimal decision problem that contain a leverage constraint,and uses the comparative static analysis method to analyzes the long-term effects of financial deleverage.Analysis results show that in the long term,deleverage make the low interest rates,low leverage and the economic steadystate of low risk,and the financial stability become stronger in the long term.However,if the soft constraints of leverage turn up,deleverage could lead to the decline of debt levels,interest rates,and the consumption level of borrowers appear declining,which make the economic fluctuations beyond the expectations of regulators and may lead to the macroeconomic risk.Secondly,based on the static model,this paper import a large number of Chinese unique characteristic of macro economy on the DSGE model,by importing the leverage constraints and two types of deleverage impact on the model,use China's macro and micro data to estimate the model parameters.These conditions make the DSGE model in the paper has the ability of analyzing China's financial deleverage effects in short-term.It overcomes the long-term effect model,which can only analyze the final state of convergence,rather than point out the short-term evolution path of economic variables.According to the analysis of the short-term effects of financial deleverage:the financial deleverage limits the financing amount of the real economy in the short term.It is a kind of demand and supply restrictions policy.It is also has the negative effects on the major economic indicators.With long-term effects by contrast,short-term effects model is more complicated,which shows the variation in the deleverage process of relevant economic variable.It even stands on the opposite of the long-term effects.In addition,the deleverage intensity and economic variable show the nonlinear relation with its essential steady recovery time,which means that the financial deleverage could trigger macroeconomic risks,and increase the difficulties of the macro policy regulation.Thirdly,in order to analyze the different rules of monetary policy and find the optimal monetary policy under the background of financial deleverage,this paper constructs four different types of monetary policy regulation equation,and use the DSGE model to simulate policy effect in different central bank welfare loss function.The results show that in the majority of cases,the price-type monetary policy regulation is better than the quantity-type monetary policy regulation.Under the background of deleverage in unpatient household,the price-type monetary policy regulation is always the most optimal monetary policy;And under the background of non-financial enterprise deleverage,if the central bank focus on short-term benefits loss,and pays attention to currency stability,or it pays attention to both currency stability and economic growth.Therefore,the optimal monetary policy rule is the price to take the primary position and the quantity to take the subsidiary position;otherwise,the single price-type monetary policy rule becomes the optimal monetary policy.When the central bank pays attention to long-term welfare losses,the best monetary policy control rule is the price to take the primary position and the quantity to take the subsidiary position.Fourthly,this paper analyzes the policy effect of different levels of policy communication based on the DSGE model.By importing the "expected shock",this paper found that not all the early policy communication is beneficial.The early communication of monetary policy is beneficial,and the central bank strengthens the expected guide appropriately and increases the transparency of monetary policy is feasible and beneficial.However,Deleverage policy should not communicate early with economic individual,and should not open the decision making process to the public.Through the way of "surprise attack" to reduce the response time of the economic individual and to avoid a bigger fluctuation of macroeconomic variables,is to against the relevant macroeconomic and financial risks.Subsequently,by adjusting relevant parameters of DSGE model,this paper simulates some policy coordination effect.result shows that in order to ensure the goal of financial deleverage and prevent financial risks at the same time,financial regulation authority can guiding resident's expectation,stable real estate market expectations when proceed financial deleverage.It can avoid large decline of real estate prices when deleverage policy impact comes up.In addition,credit innovation reduces the situation that non-financial enterprise rely on real estate collateral.These measures contribute to achieving deleverage goals and reducing the fluctuation of main macroeconomic variables.Moreover,the paper puts forward the corresponding policy recommendations about the selection of monetary policy control framework,proceeding policy communication reasonably,strengthening policy coordination and establishing improved related statistical system.