Research On The Difference Of Regional Business Cycles In China

Since the reform and opening-up,China's economy has maintained a sustained high growth trend,but the development of regional economy has always been unbalanced.Regional gap has become one of the "three gaps" in china.Coordinating regional economy development is an important task of government economy work.The difference of regional economy development level is often accompanied by the difference of the regional business cycles,the same macro-control policies of the government may have different effects in different regions,and then aggravate the imbalance of regional economy development.In order to improve the pertinence and effectiveness of macroeconomic regulation and control policy,we should fully understand the difference of regional business cycles.China is a typical developing country,and the difference of regional business cycles has its inevitability.Following the definition of relevant concepts,we sum up the relevant theories from unbalanced development of regional economy,different causes of business cycles,regional economic effect of common policy,different effect of volatility transmission etc.We use two methods to measure the differences of regional business cycles in China from two aspects:the whole and the local.The first method is learned from Harding and Pagan(2002,2006),Camacho,et al.(2008),using to measure the overall differences.First of all,we use the "Valley to Valley" method to divide the business cycles of each province in China since the reform and opening.Then,measure the differences of length,depth and shape of the cycle among provinces in China from 1978 to 2015.Here,the length of the cycle is measured by the duration of the business cycle,and the depth of the cycle is measured by the fluctuation of the business cycle.The shape is measured by the concept of "Excess".The results show that there are significant differences on the length,depth and shape of the business cycles among provinces in China.In terms of length of cycle,the eastern coastal areas show longer duration in the period of expansion,indicating that the expansion ability of these areas is stronger.Part of the central and western regions show longer duration in the period of contraction,indicating that the anti-recession ability of these areas is weak.In terms of depth of cycle,the eastern coastal provinces show larger volatility in the period of expansion,indicating that the expansion capacity of these areas is strong but not stable.In contrast,the central provinces show smaller aptitude in the period of contraction,indicating that these provinces have a better stability.And then use the Euclidean distance formula to measure the difference of the business cycles between two-two provinces.The results show that there are big differences among the provinces.Most of the regional distribution is more dispersed.Finally,we use the above methods measuring the fluctuation of the three industries in the provinces of China to further understand the differences of the regional business cycles from the industrial point of view.The results show that the expansion ability of the primary industry in China's traditional agricultural province is stronger,the anti-recession ability of secondary industry in the traditional industrial provinces is weaker,the more the region developed,the stonger the expansion capacity of the tertiary industry shows.This may be related to the characteristics of the three industries themselves and the level of development of the three industries in each region.The second method is to use the multi-level panel smooth transfer model to analyze the asynchronous effect.The asynchronous effect here refers to the asynchronous of the provinces stepping out of the contraction period of the business cycles,that is,whether the time points of the recovery of the provinces in the process of the transition from the contraction period to the expansion period are synchronized or not.How is it?Use the multi-level panel smooth transfer model to measure the asynchronous effect of the business cycles of each province.The LM test results show that the original hypothesis is rejected at 1%level,that is,the time of the contraction period of the different provinces in China is asynchronous.The results of the simulated annealing algorithm show that the eastern coastal provinces,which are more developed,usually at the forefront of the recovery.The central provinces mainly walk in the middle and the underdeveloped western regions tend to walk behind.The results of the three industries research show that in the process of transformation of the primary industry from the contraction period to the expansion period,the developed regions and some agricultural provinces are usually at the forefront of the recovery.The secondary industry is similar to the tertiary industry.During the transition from the contraction period to the expansion period,the more developed regions usually walk at the forefront and the underdeveloped areas walk behind.Basing on measuring the differences of regional business cycles in China,we analyze the influencing factors of the differences of regional business cycles from theoretical and empirical levels.Theoretical level,we first select the influencing factors,and then analyze their impact mechanism one by one.Whether it is endogenous economic fluctuations or exogenous economic shocks,the business cycles mainly transmit through trade and investment channels.The effects depend on the influencing factors such as interregional trade,investment rate,industrial structure,market-oriented,government regulation and opening.The more different the six influencing factors are,the more different the regional business cycles will be,and vice versa.Because the interregional trade scale is negatively correlated with the regional business cycles difference,we use the intermediate variable of interregional trade to analyze the influencing factors,and how the factors affect the interregional trade scale will affect the regional business cycles differences the same.Therefore,we use the gravitational model widely used in the trade field to analyze the influencing factors of the difference of regional business cycles.First,the benchmark gravity model is used to measure the overall difference of business cycles between the two-two provinces.The econometric model is constructed from the geographical distance,economic scale and price difference.Regression analysis is carried out.The results show that the economic scale has a significant negative impact,that is,the larger the economy is,the closer the trade scale will be,and thus the difference between their business cycles is less.The effect of price difference is not significant,which may be related to the segmentation of local market in China.Geographical distance between the two-two provinces is not significant too,which may be related to the growing development of China's communications.In order to comprehensively understand the influence of other factors on the regional business cycles differences in China,this paper analyzes the benchmark gravitational model,and adds the difference of industrial structure difference,the difference of marketization degree,the difference of government regulation ability,the difference of opening degree and the difference of investment rate and so on.The empirical results show that the factors such as the degree of marketization,the ability of government regulation,the open degree of economy and the investment rate have significant effects on the business cycles differences among provinces,and the impact of industrial structure is not significant,which may be due to the simple division of three industries that can not reflect the regional differences in the height of industrial structure and the internal structure of the industry differences.The difference of three factors,namely,the degree of marketization,the ability of government regulation and the open degree of economy are main reasons leading to the difference of first industry cycle fluctuation among provinces.The factors such as interregional trade,investment rate,industrial structure,marketization,government regulation and control,open degree et.will affect the secondary industry and tertiary industry cycle fluctuations significantly.Following the factor analysis,we use the ? convergence index,the unit root test of panel data and the convergence test with clustering effect to study the convergence of regional business cycles differences in China.The results of the a convergence index show that the differences of inter-provincial business cycles will be narrow gradually,but when facing greater impact,there will be a temporary increase in the business cycles among provinces.The cycle fluctuation of the second and third industry shows declining trend.The results of convergence analysis based on unit root test of panel data show that there is significant convergence in inter-provincial business cycles differences in China,and there is significant convergence in the cycle fluctuation of the three industry.The convergence test of clustering effect shows that there is a gradual and complete convergence and gradual relative convergence of the whole sample among the provinces,and there is no gradual and complete convergence among the provinces.Basing on the "differences of regional business cycles exist significantly---unified macro-control policies will have different regional effects---exacerbate the regional economic development imbalance" logic,the article puts forward two levels of policy recommendations from the central and local governments.To the central government,it is necessary to guide the construction and improvement of the regional economic prosperity index system,construct the differentiated reverse cycle macro-control policy system,and establish the coordinated development mechanism of regional economy.Local governments should explore the differentiated regional economic development path actively,including:different regions promoting the optimization and upgrading of industrial structure orderly,higher investment rate areas speeding up the transformation of economic growth,lower market areas speeding up the market reform process,weak areas of government regulation and control speeding up promoting the level of governance,higher degree of extroversion speeding up the structural reform etc.Finally,we summarize the main contents of this paper,evaluate its contribution and shortcomings,and look forward to the follow-up research direction.