China's Economic Fluctuations From The Perspective Of Financial Accelerators

For a long time in the past,economists have been arguing over whether the currency is neutral or non-neutral.The role of money and credit in economic fluctuations and economic cycles has always been an unchanging issue in the history of Western economics.It now appears that the 2008 global financial crisis has made this issue a very clear conclusion.Whether the currency is neutral or non-neutral should end,and the currency is losing its neutral character.The theory and practice of monetary policy itself is a process of continuous change,deepening and perfection with the development of economic structure and the development of policy orientation.The original classical economics believed in "Say's Law",and the classical "dichotomy" split the economy into two mutually unrelated parts-the practical aspect and the monetary aspect,and the economic equilibrium is entirely dependent on various physical factors.Money only acts as an instantaneous trading medium.After that,Wicksell first realized that the currency is an endogenous factor of the economy,and proposed the "cumulative process theory" to clarify the influence of money on economic equilibrium and economic fluctuations,and then the neoclassical economy.The typical representative of the school in the field of economic cycles,the real economic cycle theory hypothesis,sets economic fluctuations as exogenous factors,and the Keynesian school believes that the root cause of economic fluctuations is the endogenous factors of the economic system.The economists understand and describe the economy.Constantly innovating,but always exclude the impact of monetary and financial factors on the macro economy from the analytical framework,that is,financial neutral assumptions.Until the emergence of the financial economic cycle theory,with financial factors and financial markets as the starting point,a series of theories that study the formation of the financial cycle and the mechanism of interaction with the economic cycle gradually form a system.This paper draws on the latest developments in macroeconomic theory since the global financial crisis,focusing on the following issues:the nature and connotation of the financial accelerator mechanism,and the internal mechanism and function of the financial accelerator in the financial cycle.The starting point of this paper is whether finance has an independent operating law and has a major impact on the economy.Whether finance is "non-neutral" to the economy and has a procyclicality.The role of finance through the financial accelerator mechanism,how it affects economic cycle volatility,and how it affects long-term economic growth is the core of this paper.This paper is divided into five parts:The first part is the introduction,including the background and research significance of the paper,and the related literature review.It briefly introduces the structure of the paper and expounds the possible innovations and shortcomings of this paper.The second part is financial The analysis of the implementation characteristics of the accelerator effect first paves the relevant theoretical basis,and then uses HP filtering method to comprehensively calculate the short financial cycle of China,focusing on the financial accelerator effect under the superposition of China's financial cycle and economic cycle;the third part is the inclusion The DSGE model of the financial accelerator mechanism is constructed in detail.The construction process of the DSGE model with 5 departments and the economic behavior and logical relationship between the departments are introduced in detail,and the parameter calibration and steady-state solution are performed.The fourth part is the analysis of the model results.From the local analysis,the paper studies the cost of bank supervision,the impact of risk and savings premium on other major variables,and then carries out more complex general equilibrium simulation.The fifth part is conclusions and policy recommendations.The research shows that combined with the current economic and financial environment in China,And drawing on foreign experience,China should implement Wide credit+strict supervision "of the policy mix.Different from foreign advanced economics,China's financial cycle is almost in sync with the economic cycle.With the continuous development of finance and the improvement of economic structure,the financial cycle will gradually lengthen.China's financial cycle has a significant procyclical characteristic,and the inflection point of the financial cycle will be one quarter ahead of the economic cycle.The enterprise's own utility maximization function determines the lower limit of the leverage threshold,while the bank's own utility maximization function determines the upper limit of the leverage threshold,so the microscopic body that controls the leverage is the bank.The bank's bank agent,supervision and clearing costs itself and the external financing premium itself do not produce the financial accelerator effect.The existence of itself is the correction of information asymmetry,but the deviation of the relative equilibrium values between the two will lead to different financial cycles.Failure to correctly respond to information asymmetry is the real cause of the financial accelerator effect.Eliminating information asymmetry and financial friction will reduce the financial accelerator effect because the possibility of deviation will decrease.Based on this,the policy recommendations proposed in this paper are mainly aimed at ironing the financial cycle and reducing information asymmetry to avoid deviations,including:improving the enterprise information release platform,strengthening the rational coordination of the monetary policy cycle and the regulatory policy cycle,and guiding The US monetary policy is moderately decoupled and the credit transmission channels of monetary policy are weakened,and interest rate transmission channels are strengthened.