Open Economic Circumstance Influence To The Exogenous Shocks Effect In Chinese Economic

Exogenous shock is the leading cause of economic fluctuations. Economic fluctuation affects the stability of a country’s economy and residents’ welfare level. Therefore, identify the causes of economic fluctuations, select measures correctly, and ensure the economic stability is a focus problem in macroeconomics.In macroeconomic research in recent years, many scholars in our country set Chinese economy a small open economy, and in that case, discussing economic fluctuations and the problem of economic policy choice. This paper believes that, with China’s increasing openness, and the gradual deepening of economic globalization, our country faces a huge impact on domestic macroeconomic from the external economic environment which is keeping open. Previous literatures mostly supposed the open economic environment as given, which will ignore the impact on the macro economy from the open economic environment itself. Thus, this paper hopes to take the open economic environment as research object, explore how open economic environment affects the domestic economy and national economic policy choices, especially the impact effect from monetary policy and technological changes.This paper proceed from the open economic environment of our country, set the domestic economy as a small open economy system, and set up an open new Keynesian DSGE models. Then, in order to establish the control group, this paper deleted import and export department in the open economy model, and made the remaining as an unreal closed economy model. So that to study the influence of opens economic circumstance on Chinese economic with counterfactual analysis. Taking some literatures for example, this text calibrates parameters, to estimate DSGE models using the domestic macroeconomic quarterly data and the Bayesian estimation, and finally through the Impulse Response Analysis, this text contrast observed the result of two models affected by exogenous shocks.Research conclusions in this paper:(1) Open economic environment expanded the impact effect of monetary policy and technical progress on the economic variables such as output, wages and inflation. (2) Most economic variables affected by the impact need shorter time to return to their steady-state value in open economy environment than in closed economy environment. (3) Technology progress and monetary policy has sustainable impact on Chinese economic variables.