On The Dynamic Characteristics Of China's Business Cycle And The Effectiveness Of Monetary Policy

Since 2012,the economic growth rate has gradually declined to below 8%.The structural problems concealed by the high-speed growth have gradually emerged,and China has formally entered a new normal period.During this period,there appeared a typical "dragging long tail" trend in the pattern of business cycle: economic growth moderately shifted to medium and high speed,economic fluctuations tended to microwave and the duration of short cycle prolonged significantly,indicating that the economic system has undergone structural changes.At the same time,the stock,real estate and other financial markets have experienced great turbulence,making the financial market volatility have a significant impact on the real economy.In the face of the new economic situation,the central bank,on the basis of stabilizing economic development,takes into account the adjustment of economic structure,the prevention of financial risks,the implementation of a sound monetary policy to maintain stable economic development,and adheres to the bottom line of non-systemic financial risks.This dissertation is mainly divided into six chapters to analyze the characteristics of China's business cycle fluctuation and the effectiveness of monetary policy.The first chapter is the introduction part of this article.It mainly elaborates the background and significance of the topic,collates and summarizes the relevant research and literature of the business cycle theory and monetary policy theory so far,and finally explains the innovation and the structure of the article.By sorting out the existing theories and analyzing the new typicalized facts,and after investigating the current macroeconomic structure of our country,two core issues are raised in this paper: first,under the circumstances of new fluctuation characteristics in the business cycle,the existing monetary policy framework can reasonably solve new phenomena and new problems;second,with the connection between financial market and real economy;Whether monetary policy can stabilize the long-term trend of economic growth while taking into account the regulation and reform of financial markets?The second and third chapters mainly analyze the fluctuation characteristics and driving factors of the current business cycle.Chapter 2 reviews the long-term trend and fluctuation characteristics of previous business cycles in China,and makes a preliminary judgment on the reasons for the change of cycle characteristics by comparing the variation of important macroeconomic variables between the two cycles.The results show that the adjustment of economic structure and the transformation of macroeconomic policies are the main factors for the change of the characteristics of previous business cycles.At the same time,after comparing the fluctuation characteristics of the two adjacent business cycles,this paper finds that the consumption maintains the same level,but the investment and import and export industries have declined at the present stage,leading to a slowdown in the long-term trend of economic growth.The existence of irrational prosperity and structural distortion in financial markets has increased financial risks and increased the difficulty of monetary policy regulation.The transformation of macroeconomic policy from active intervention to moderately fine-tuned robust policy has greatly reduced the fluctuation range and frequency in the economic system.Chapter 3 further explores the driving factors and their transformation characteristics of the current business cycle,in order to analyze the formation mechanism of the current business cycle change from the perspective of driving factors transformation,and to provide a preliminary judgment for identifying the morphological characterization of the future business cycle.Specific conclusions are as follows: Firstly,the short-term impact on the economy is gradually weakening,and the term structure of the business cycle is likely to continue to stretch.Secondly,the change of Zhu's cycle is still the dominant factor in this cycle.The drop of investment on economic growth is not only reflected in the cyclical decline,but also will lead to the overall decline of the cycle plane.Finally,independent R&D has gradually become the main mode of technological development.Independent innovative new technologies will become the core driving force of economic growth in the long run.However,since the process of new technologies from R&D to large-scale production is relatively long,the technology spillover at this stage is not enough to offset the pull-down effect of investment.It is necessary for the growth of new technologies to be the main driving force of economic growth.Chapter 4 examines the validity of price-based monetary policy and quantitative monetary policy under different business cycle fluctuation characteristics,and uses MS-VAR model to measure the validity of quantitative monetary policy and price-based monetary policy under different regional systems,and draws the following conclusions: the economic growth range can be divided into high-speed growth range and low-speed growth range.Interval.The regulatory power and sensitivity of quantitative monetary policy have undergone structural changes,which is consistent with the fact that the quantitative intermediary in China is out of touch with the ultimate goal.However,the intensity of price-based monetary policy regulation has not changed significantly,but the sensitivity has increased significantly.At the same time,because the interest rate regulation in the expansion interval has a strong time lag,which makes the economic system overshoot,the quantitative monetary policy in the expansion interval is the dominant strategy.On the contrary,because of the promotion of financial market and the deregulation of interest rate,the sensitivity of interest rate to supply and demand in credit market has been significantly improved,thus the effectiveness of price-based monetary policy has increased.Chapters 5 and 6 mainly focus on the impact of financial cycle change on business cycle and monetary policy effectiveness.In the fifth chapter,in order to measure the operation situation of China's financial cycle effectively,the TVP-VAR model is used to simulate the economic system,and the linkage between China's financial cycle and business cycle is deeply analyzed and explored.The results show that,with the international financial crisis as the watershed,the time-varying characteristics of the two sample intervals are significantly different: the economic structural parameters before the crisis are specific in different economic backgrounds,but tend to be stable after the crisis.At the same time,the business cycle can not effectively drive the development of the financial cycle,and the financial cycle has a greater one-way spillover effect on the business cycle.The reason is that there is a disconnection between the financial market and the real economy,a large number of capital flows into the financial market,and because of the mismatch of credit supply,credit funds are idle in the financial market.Chapter 6 mainly explores whether monetary policy can reasonably restrain the risks in incomplete financial markets with the further deepening of interest rate marketization and keep the high-quality operation of China's economy at the same time,and focuses on the specific impact and transmission path of monetary policy on credit market and real economy under the influence of financial friction.The main conclusions are as follows: the sensitivity of interest rate to the rate of return on capital is still low,and the interest rate has not been able to effectively reflect the supply and demand relationship in the credit market.Financial market friction is large,financing costs are too high,leading to risk premium volatility.At the same time,the regulatory effect of monetary policy shocks on credit market has changed from big ups and downs to stable economy.Especially,the rising trend of risk premium and leverage rate slows down with the increase of openness,and finally shows a downward trend under the effect of tightening policy.With the promotion of interest rate marketization,the effect of tightening monetary policy on real economy is characterized by rapid fine-tuning.Currently,China's economic growth is microwave,and the monetary policy regulation should smooth down economic fluctuations through fine-tuning,and mainly exert its ability to regulate and control financial markets.