Policy Shocks and Macroeconomic Fluctuations in a Two-country Dynamic Stochastic General Equilibrium Model: Evidence from China

Yong Ma

Asian Economic Journal, 2016, vol. 30, issue 1, 25-45

Abstract: type="main">

In this paper, we construct a two-country dynamic stochastic general equilibrium model to investigate the sources of business cycles in China and the contributions of policy shocks in economic fluctuations. The empirical results from Bayesian estimation show that, apart from the traditional supply and demand shocks, monetary and fiscal policy shocks also play important roles in determining China's economic fluctuations. In addition, we find significant feedback effects between monetary and fiscal policies in China, indicating that policy coordination is an important feature of China's monetary and fiscal policies. Overall, these results not only shed new light on the policy factors behind China's economic fluctuations, but also provide new evidence that is helpful for understanding the policy transmission mechanisms in China.

Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1111/asej.12083 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:asiaec:v:30:y:2016:i:1:p:25-45

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1351-3958

Access Statistics for this article

Asian Economic Journal is currently edited by Sung Yun-Wing and Shigeyuki Abe

More articles in Asian Economic Journal from East Asian Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().