A Study On The Heterogeneity Of The Regional Business Cycles

With China's reform and opening up, differences in regional economic development increases, the particularity of the region itself became increasingly obvious that economic fluctuations between regions are more complex. Under this context, this paper focuses on the regional economic cycle in a single country, research the regional economic cycle heterogeneity.By analysising the relationship of the economic cycles between different region, we found that there is a significant heterogeneity the regional economic cycle in China. Also by further researching in China's various forms of regional economic cyclical fluctuations, expansion power, the inner relation, we fully recognize that China's vast differences of regional economic cycles and changes in the causal relationship were the regional economic cycles'characteristical performance.Then this paper discusses the formation mechanism of heterogeneity. Analysis showed that the supply shock is the main factor to cause the regional heterogeneity of the economic cycle. It's specifically including the regional conditions, the cost differences of supply of the production factors, the regional innovation capacity, the unbalanced system supply, and the inter-district differences in trade and international trade.Finally, we use VAR models and impulse response analysis method to analysis the contribution of each major factor which affecting the formation of the heterogeneity of regional economic cycles. Accordingly, we suggest that the northwest region should try to improve their investment structure in fixed assets, the middle regions should increase the level of the foreign trade, the coastal region should fouse on improving the innovation capacity, and comprehensively promote the process of market reform.