Research On The Influence Of Uncertainty On China's Macroeconomic System

Nowadays,uncertainty is drawing more and more attention in China and around the world.It's a common sense that uncertainty will affect economic operation.Based on the relationship between uncertainty and China's macroeconomic system,this paper studies two major themes by establishing certain models,which are the prediction effect of uncertainty on economic growth,and the interaction between uncertainty and China's macroeconomic system.Before modeling,this paper assigns two major indexes of uncertainty and four major indicators of China's macroeconomic system: the index of economic and financial uncertainty,the index of economic and policy uncertainty,the year-on-year growth rate of real GDP,inflation rate,the year-on-year growth rate of M2 and interest rate.In this paper,the GARCH model is used to estimate the volatility of the stock market rate of return as the proxy of the index of economic and financial uncertainty.It is found that there may be structural changes in China's economic growth by observing the real GDP growth rate in China.This paper uses Bai-Perron endogenetic multiple structure mutation test to confirm the existence of breakpoints,and in the subsequent study,breakpoints are eliminated.Based on the first research problem,which is the prediction effect of uncertainty on economic growth,a prediction model is established.The results show that,for China,the index of economic and financial uncertainty has a significant correlation with China's economic growth,while the index of economic and policy uncertainty has little to do with China's economic growth.Based on the second research question,which is the interaction between uncertainty and China's macroeconomic system,a VAR model is established.It is found that there are interactions between macro-economic system and economic and financial uncertainty,though the interaction is weak.On economic and financial uncertainty,only the interest rate will have a short negative impact.Comparatively speaking,economic and financial uncertainty only has a short positive impact on money supply.