An Econometric Research On The Measurement Of Business Cycle And Sub-Business Cycle And Their Relations

The working principles,external forms and evolving directions of business cycles are always core issues in macroeconomics.In recent years,with the improvement of economic statistical indicators,studies correlated to business cycles also show the tendency of deeper extension and downward shifts.Specifically,studies on sub-class business cycle are the most interesting.Sub-class business cycle,as is defined,is the cyclical operation character of some indicators like economic growth.Regional business cycle,economic quality cycle,financial cycle,monetary cycle and fiscal cycle are all typical subclass business cycle.Thus,a series of problem emerges: Why do subclass business cycle come into being? How to measure them? What’s the extrinsic and intrinsic correlation between subclass business cycle and business cycle?All of these need exact answer.Therefore,this study attempts to comprehensively reconsider and demonstrate econometrical description,working characteristics,variation principles and evolving directions from the perspectives of subclass business cycle and provide useful attempts for further studies.This article lays out according to deduction.In Chapter1 and Chapter2,we give a detailed illustration around the definition,measurement,theoretical foundations and literature review of business cycle and subclass business cycle.In Chapter3,our study demonstrates our critical thinking on the basis of controversy on the measurement of business cycle,giving theoretical demonstration to business cycle depicted by valley-valley segmentation.Indicating that when data we use varies from low frequency to high frequency,business cycles divided by valley-valley segmentation have obviously different meanings(Kitchin cycle is mainly divided by quarterly data while Juglar cycle is divided by annual data).Meanwhile,it makes a distinction on two important definitions: economic growth cycle and component of business cycle in detail.Finally,on the basis of the new perspective of econometrical evaluation,we comprehensively verify default cyclical parameters in EVIEWS and6.25 originated by Uhlig,making theoretical and applicability evaluation to business cycle components depicted by different filter parameter methods.From chapter 4,the article enters substantial contents.All of the chapters have a discussion on the correlation mechanism between business cycle and certain subclass business cycle.In chapter4 we illustrate transmission and correlation mechanism among Chinese regional business cycles.Research shows that national and regional business cycle displays a coordinated variation in general.From the chronological sequence,national and regional business cycle has gone through three stages of development: relative independence,great improvement of coordination and a stable rise of coordination.According to dynamic correlation,eastern area dominates in the national economic development process,western and middle areas gradually link a positive interaction with other parts of the nation,forming a phenomenon that eastern and middle economic rim are extremely tight and western economic rim builds a growing connection.However,north-eastern area,affected by fixed industrial structure and geographical characteristic,needs long-term concern for its specific developmental issues and growth limitation.Chapter 5 illustrates correlation mechanism between business cycle and financial cycle.According to research,China has experienced three full rounds of business cycle and financial cycle in total since 2005.Generally,financial cycle fluctuates ahead of business cycle.Recently,fluctuation of business cycle and financial cycle is increasingly lower than before,indicating that macroeconomic and financial system are running more steadily.Furthermore,directional spillover effect from financial cycle towards business cycle occupies a leading position in total spillover effect.That is,under most circumstances,financial system has a larger impact on macroeconomic than macroeconomic does.Chapter 6 builds a framework of quality business cycle thoroughly in accordance with new development philosophy.All the provinces,autonomous regions and municipalities haven’t shown notable regional imbalance in the dimensions of steadiness,shared development and innovation while great variance is shown on the dimensions of green,open and coordination.National business cycle keeps a positive and coordinated correlation with national and regional quality business cycle,which suggests that rate and quality of Chinese economic growth can achieve comprehensive arrangement now.Chapter 7 has a detailed discussion on the relationship between business cycle and economic policy cycle,in which we mainly focus on the management of business cycle fluctuation.The results show that contraction or expansion of fiscal policy cycle and monetary policy cycle may prompt business cycles to move towards the same direction.The reaction of fiscal policy has certain procyclicality,but the degree of which has been weakening.The reaction of monetary policy to the business cycle has always shown a counter-cyclical character,the response to business cycle shocks and inflation shocks has also been weakening.Chinese macroeconomic regulation takes fiscal policy as dominant factor and monetary policy as supplementary factor,it’s mainly embodied in two aspects that expansive fiscal policies expand money supply while expansive monetary policies cause fiscal contraction.The Granger causality between economic cycle and economic policy cycle is mainly reflected in the relationship between economic cycle and monetary policy cycle,and only after the new normal of the economy,the two showed obvious coupling relationship.However,it should be noted that the main effect of the current interaction mode between fiscal policy and monetary policy is to improve the short-term effectiveness of stable economic growth,while the medium and long-term economic effects are not significant.In conclusion,our work summarizes the correlation mechanism between business cycle and subclass business cycle and does parts of primary academic evaluation research.There is a limitation in keeping pursuing the extensive meaning of model with the development of econometrical techniques.On the contrary,using models wisely in order to measure accurately becomes increasingly important.Preliminary attempt in measurement evaluation is also an important attempt in research ideas of our text.