Research On The Impact Of Financial Cycle Differences Between China And The United States On China’s Short-Term Cross-Border Capital Flow

With the deepening of my country’s opening to the outside world,short-term cross-border capital flows have intensified.Although short-term cross-border capital injects funds into the development of my country’s economy to a certain extent,which is liquid,speculative and sensitive,can also expose China’s economy to financial risk shocks from international markets,causing domestic economic turmoil and even triggering financial crises,so it is necessary to pay attention to what makes short-term cross-border capital move.With the acceleration of economic and financial globalization,the financial cycle has become the focus of attention for driving short-term cross-border capital flows.As the representative of the external economy,changes in the financial cycle and monetary policy of the United States will have an important impact on global capital flows,and policy adjustments will often have uncertain effects on the economic and financial systems of other countries such as China,making the economic and financial relationship between China and the U.S.more and more complex.Therefore,we should not limit our interpretation of the drivers of short-term cross-border capital flows and risk prevention to a single perspective of our own financial cycle,but also pay full attention to the impact of the differences in financial cycles between China and the U.S.on my country’s short-term cross-border capital flows.This paper first systematically sorts out the existing literature;then it defines the relevant concepts and summarizes the classic theories of cross-border capital flows;further measures the difference between the financial cycle between China and the United States,analyzes the difference between the financial cycle between my country and the United States and the trend of short-term cross-border capital flow in China,and conducts a theoretical analysis of the impact of the difference in the financial cycle on short-term cross-border capital flow;Through the TVP-VAR model,the impulse response research is carried out to study the time-varying effect of the difference in the financial cycle between China and the United States on short-term cross-border capital flows,and then put forward targeted policy recommendations.The empirical analysis draws the following conclusions: First,the increasing differences in the financial cycle between China and the United States will have a positive effect on short-term cross-border capital flows.Second,the difference in the financial cycle between China and the United States can indirectly affect short-term cross-border capital flows by influencing investor sentiment,but it has a time-varying effect.According to the theoretical analysis and empirical test results,this paper puts forward the following policy suggestions: First,establish monitoring and early warning of financial cycle differences.Second,strengthen the supervision and prevention of short-term capital flows.Third,formulate a scientific,rational and gradual capital account opening policy.Fourth,strengthen international economic policy cooperation and coordination.