The Characteristics And Causes Of Business Cycle In Chinna's Industries

In recent years,the high-speed growth of Chinese economy is over.Especially the GDP growth rate decreased year by year after the end of the 2008 world economic crisis.And the industrial economic as the core of the national economy also developed more and more slowly.The difference of profit between real economy and virtual economy such as financial services or real estate,make the capital and talent flow to the virtual economy constantly,which also make the real economy industrial practitioners feel more and more difficult to operate their company.Any sustained,healthy and stable development of economy must be based on the reasonable industrial structure.Big bubbles of economy always happens when we pay too much attention to the virtual economy while ignoring the investment of the real economic industry,which led to the economic crisis eventually.The industrial entity economy as of the supply side of economy offers all kinds of goods to our society.Only by the advanced productivity of industrial economy,can the social economy have the power to be thriving,which is also make sure that the prosperity of virtual economic is really good to our society.It is really an important and significant thing that we find out the current problem and the law of industrial economic that exists in china by scientific and effective empirical research method.The paper with the industrial economy of 34 industries in our country as the research object is to find out the characteristics that exists in the China's industrial business cycle and its cause of the characteristics by using the method of econometrics and the theory of business cycle.And the paper will try to find out the reasonable factors of the problem and provide a reasonable policy after the empirical research.The whole content of this paper is divided into two levels:on the one hand,it find out that whether there exists co-movement in the fluctuation of the industrial business cycle through analyzing the correlation coefficient of each industries;On the other hand,we use the factor analysis method to extract the composition of co-movement.Then we use the potential influence factors to explain the reason of co-movement of industrial business cycle by the utilize of GARCH regression model and the theory of business cycle mechanism.At last,we draw our conclusions through analyzing the coefficient of influence factors and the test of significance.As to the research method of this paper,we combine the composite index method and correlation method to research the co-movement characteristics.Firstly,we composite the industrial added value,the main business income and the fixed investment amount to the composite index of every industries.The composite index can well describe the business condition.Then by HP filter method we filter the trend of every time sequence and get the fluctuating components that is needed by the correlation research.Finally,we find the law of co-movement in the industrial business cycles through analyzing the correlation coefficient of each industries and the correlation coefficient between industrial sector and every industry.In the empirical studies of co-movement reasons,we use the factor analysis model to obtain the common factor of every industrial fluctuations.Then we do the GARCH regression and test of significance to explain that how the potential factors form the co-movement of industrial business cycle.Through the correlation research of the economic cycle fluctuation of China's industrial industry,this paper finds that:(1)From January 2006 to June 2017,there was a very obvious co-movement between the economic cycle fluctuation of China's industrial industry,and also specially in the fluctuation of the economic cycle of the industrial sector.(2)the co-movement of economic fluctuation in China's industrial industries makes the economic cycle fluctuation range of China's industrial sector is bigger than every industrial industry,which means that dispersion effect does not happen there.(3)The growth trend of China's industrial industry is gradually declining.And the policy stimulus after the economic crisis strongly makes industrial economy increase slowly and shortly.But it is difficult to prevent the decline trend.From GARCH model regression on the components of the co-movement between the industrial industries,we draw several conclusions that:(1)The industrial sector economic transmission mechanism is the vital factor to form the co-movement in the economic cycle fluctuation.And the synergistic volatility of the current period will be strongly influenced by the lagged one-time synergistic fluctuation,which is affected by the weaker negative effect of the lagged two periods;(2)The synergistic fluctuations in the China's industrial industry are also affected by the impact from the external impact mechanism at the same time.(3)Among the causes of the external impact,external market impact like the industrial exports is the strongest than others.And the monetary policy followed by the external market impact.The impact of fiscal policy is a weak factor;(4)The cumulative effect in the external shock mechanism is significantly present in the industrial exports,that is,the previous export will have a significant negative impact on synergistic volatility.The cumulative effect of fiscal policy is weak,and the last period of fiscal policy has only a weak influence on the co-movement;(5)The impact of monetary policy on the co-movement is lagging behind,that is,monetary policy will not have a role in the current period.And the lagging behind impact is negative.On the basis of the predecessors,this paper has carried on the innovative research to our country's industrial economy.That mainly manifests in several aspects:(1)The research object is novel.The domestic research objects about the co-movement in the business cycle fluctuation are national economy,the members of the international cooperative economic organizations and the financial market.There are few empirical business cycle studies on the industrial industry;(2)Using the composite index method to apply the industrial condition research which describes the condition more comprehensive;(3)Selecting 34 industrial industries as the research objects to carry out the relevant research is a more comprehensive way;(4)In the theory model of this paper,the transmission mechanism and the external impact mechanism are distinguished.And the time span of the selected data samples contains the whole economic cycle fluctuation process.This paper makes an empirical study on the characteristics of industrial business cycle and the causes of forming this characteristic,and obtains the consistent conclusions in the theory and regression model.However,there is still room for improvement.The paper can still carry on the regression analysis in different periods,to see how the effect of the economic factors change in the different backgrounds.And to get more concrete conclusion analysis.For example the paper can divide the time into three periods:before the 2008 economic crisis,during the 2008 economic crisis and after the 2008 economic crisis.Then the introduction of dummy variables can get the background factors into the model.