Studies On The Relationship Between Fixed Investment Cycle And Business Cycles In China's Economy

Investment fluctuation has been considered the main cause of economic fluctuation in modern economic cycle theory. The most important fluctuation element in GDP is investment requirement. The management of investment requirement has been the main policy measure for macrostructure. The judgment of economic cycle mostly depends on investment action. Therefore, it's necessary for us to analyze and judge the dynamic characteristic of our country's investment cycle fluctuation action and the relationship between investment cycle and economic cycle. Consequently, we can provide powerful foundation for macrostructure policy. At the present time, our nation's economic is in the unclear cycle period. In this situation, Firstly, we verify whether the fixed investment and real GDP affect each other equally. And then we can find out whether the relation depends on some certain period. This is very important for judging the investment policy during the period of fluctuations and recession. This paper uses some typical econometrics measures to describe and judge the relationship between investment cycle and economic cycle and then provide some suggestions for macroscopically policy.The article is formed with four chapters. Chapter one describes the research actuality and literature sum-up of fix asset investment and economic cycle fluctuation. In the chapter, we introduce the economic increase model which has fix asset investment inside, the experiential research which is about how fix asset investment influences economic cycle and the stylized facts between fix asset investment fluctuation and economic cycle fluctuation.In chapter two we use H-P filter method to decompose the trend component and fluctuation component of the fix asset investment ratio serial and the economic increase ratio serial. And then we use Granger method to verify the relationship between our nation's fix asset investment ratio and economic increase ratio. After that we find out that each component of fix asset investment can explain the change of real output. However, only the trend component of economic increase ratio has some effects on fix asset investment ratio. This means that fast economic increase will feedback on fix asset investment.In the fourth section of chapter two, we calculate the dynamic correlation coefficient between economic increase ratios and fix asset investment ratio. We can find out that fix asset investment ratio and economic increase ratio do have some positive relationship from each other. But the relationship is unsymmetrical. This is the cause that fix asset investment influence economic increase ratio unilaterally.The result that dynamic correlation relation makes is cursory. Therefore, in the second section of chapter three, we use Co-integration Analysis and Error Correct Model to research them deeply. Firstly, we make unit root test to fix asset investment and economic increase serial and we know that they are integrated of order 1 process. And then we use SVAR model to review the relationship between fix asset investment fluctuation ratio and economic increase ratio. Firstly, we use GARCH model to describe the serials of fix asset investment ratio and economic increase. And then we use the impulse response function of SVAR model to identify the dynamic reaction process between fix asset investment fluctuation component and economic increase ratio fluctuation component. The result shows that in the former five months, the two impulse reactions are both negative. And then they become positive slightly. In two months, they both become zero and not last forever. On the other hand, they have two different sides. One, the impulse of fix asset investment fluctuation to economic increase ratio is more sensitive. Two, the impulse of fix asset investment fluctuation to economic increase ratio is stronger.