Energy Price And Economic Fluctuation

In recent years,world energy prices have risen sharply,and energy plays an important role in all economies,affecting demand and supply.The way it depends on the intensity of energy and the extent to which an economy produces energy as a raw material.For economies in net oil and gas producing or consuming countries,without adequate international risk sharing,continued price increases could mean potentially huge wealth effects.However,China is a developing country with continuous economic development and increasing energy consumption.It is of great practical significance to study the impact of energy shocks on China.In order to analyze the impact of this shock,this paper establishes a dynamic general equilibrium model and uses indirect reasoning testing to evaluate its adaptability.This method has proven to be an effective and practical tool for evaluating DSGE models.This method overcomes DSGE One of the main problems faced by the model is identifying and estimating parameters.The DSGE model established in this article enables us to theoretically clarify the various channels through which energy prices may affect demand and supply and it’s purpose is to achieve Price stability is most important to understand what drives price volatility and inflation.The results of the impulse response analysis and the results of variance analysis show that:(1)Positive energy price shocks will have a significant negative impact on China’s macroeconomics,have a significant inhibitory effect on total output,consumption and real wages,and will lead to inflation in severe cases;(2)Productivity shocks and currencies The impact of policy is the reason for the changes in the main macroeconomic variables.The contribution of monetary policy is consistent with the assumption of New Keynesianism.It has a significant impact on economic activities and can offset the impact of fluctuating energy prices;(3)Compare the financial crisis During the period and the sample period,it was found that the energy price shocks during the financial crisis were more volatile,and high volatility led to inflationary pressures in the economy,exacerbating the recession and the decline in output,indicating that energy price shocks are an important driver of economic activity And monetary policy is a tool to offset short-term output decline.