Study On The Impact Of Sudden Disaster On China’s Macro Economy And Policy Choice

The world has entered a period of frequent occurrence of sudden disaster events,the occurrence of a large number of sudden disaster events,on the one hand caused a huge loss of human resources,on the other hand,also destroyed the normal economic activities,to China’s economy has brought huge losses.In order to explore the impact of sudden disaster events on China’s economy,and to what extent the policies of the government and regulatory authorities can mitigate the negative impact of such events on the economy,it is particularly important to systematically analyze the impact of sudden disaster shocks on China’s macro economy and explore corresponding policies.Most scholars at home and abroad use econometric models to study the impact of sudden disaster events on the macro economy,but this approach lacks consideration on the micro level.Because DSGE model has the advantages of logical internal consistency and combination of macro and micro economy,this paper introduces sudden disaster shock into DSGE model to explore the impact of disaster events on the economy and the policy choice to deal with such shock.Based on domestic and foreign literature,this paper studies the macroeconomic effects of sudden disaster events in China and the corresponding policy choices.First of all,a DSGE model including household,manufacturer,government and central bank is constructed.The model includes sticky price,monopolistic competition,capital adjustment cost and other features,and the shock of sudden disaster is introduced into the consumption behavior and total factor productivity of the model.Among them,sudden disaster events are divided into short duration disaster events and long duration disaster events.Under these two kinds of events,the sudden disaster shock is expressed in the form of two-state Markov transition matrix and logarithmic first-order autoregressive function respectively,and the two kinds of events are discussed respectively.Second,in both cases,respectively,the introduction of quantitative type,price,hybrid three rules of discretion in monetary policy and government spending,government tax rules of discretion two fiscal rules,the comparative analysis on three kinds of monetary policy tools and sudden disaster impact under two kinds of rules of fiscal policy impact on macro economic variables,trying to find a better fiscal and monetary policies.Finally,through the analysis of empirical results under monetary and fiscal policies,combined with better monetary and fiscal policies,this paper studies the impact of sudden disaster shocks on China’s macroeconomic operation in two scenarios respectively,and conducts variance decomposition and stability test of impulse response results.Through research,this article finally the conclusion is as follows: first,the impact of the markov transition matrix form and logarithmic form of first-order autoregressive functions under the impact of macroeconomic fluctuations effect is different,the former results of impulse response of the variables are discrete,the characteristics of the "jump",while the latter on the fluctuation of macroeconomic performance for a relatively slow process.Second,based on the analysis of impulse response results and the judgment of social welfare loss standard,this paper argues that when a disaster event with short duration occurs,the combination of monetary policy and discretionary rule of government spending can better deal with such events.A mix of monetary policy and government tax discretionary rules is better prepared to deal with long-duration disasters when they occur.Thirdly,the maximum impact of sudden disaster shocks with short duration on output and consumption reached-0.6%and-0.15% respectively.The maximum impact of long-duration sudden disaster shocks on output and consumption reached-0.2% and-0.18% respectively.The results show that no matter what kind of disaster form,it will have a negative impact on consumption,output and other macroeconomic variables,cause the whole macroeconomic recession in a short period of time,weaken the ability of macroeconomic risk resistance.