Research On International Coordination Of Macroeconomic Policy In The Non-synchronous Business Cycle

As the economic globalization develops and the economic link between countries strengthens,major world economies have fully realized the importance of international coordination in the field of macroeconomic policy.G20,as an informal international regime under the Bretton Woods system,first originated during Asian Financial Storm,and later escalated into Leader Summit due to the 2008 Global Financial Crisis.Though it is always one of the most important topics in every session of Leader Summit,macroeconomic policy coordination effect among member countries within the framework of G20 has continuously been questioned.Furthermore,business cycle of world major economies has been out of sync since the financial crisis,which makes international macroeconomic policy coordination more difficult.This paper,based on both quality and quantity analyses of business cycle synchronicity of G20 member countries,teasing out basic macroeconomic policy coordination hypothesis principles from international regime theories,and comparing cost effectiveness of national welfare increases of G20 members in the way of empirical research with the help of Lucas utility function,aims to come out with concrete suggestions and countermeasures about how to raise policy coordination effect within the framework of G20.This paper,in theory,provides a solution to disputes of economic interests between countries like big powers and small states,developed countries and developing countries,leaders and followers under the topic of macroeconomic policy coordination.In reality,macroeconomic policy coordination is beneficial to offering a solution to taking the global economic challenge like financial crisis for main economies under the regime of G20.Meanwhile,policy suggestions on promoting the vice of global economic governance will be given to China in the period of the new normal of economic growth.The paper extends its research methods upon the basic principle of “problem raising – problem analyzing – problem solving”,and divides itself into eight chapters.ChapterOne,the introduction part,mainly introduces the main research topic,its significance,definitions of related concepts,literature review,research ideas,methods and innovation points.Chapter Two analyzes the asynchronous characteristic of macroeconomic policy from the two dimensions of history and presence,with Chapter Three quantitatively measuring the business cycle synchronicity of G20 member countries since its establishment.Chapter Four,teasing out international regime theories and proposing G20 macroeconomic policy coordination theory hypotheses,develops a mathematical model to measure the macroeconomic policy coordination effect by improving Lucas utility function model.Chapter Five empirically studies the coordination effectiveness of G20 macroeconomic policies under various circumstances,while Chapter Six carries out practical case analyses of G20 macroeconomic policy coordination process asynchronous with business cycles.Chapter Seven,on the basis of the former analysis result,proposes related advice and suggestions as to how to increase the macroeconomic policy coordination effect of G20.Chapter Eight,last but not least,reviews and summarizes the whole paper,points out its limits and deficiencies and highlights the future directions of research.After scientific arguments and analysis,this paper finds: firstly,economic recovery in the asynchronous business cycle requires that major economies must coordinate,but the coordination will harm the sovereignties of economies.As a result,there should be a balance between them.Secondly,macroeconomic policy coordination in synchronous business cycle is easier than that in asynchronous business cycle.Thirdly,the establishment of long-run mechanism is good for macroeconomic policy coordination between members in the period of post financial crisis.Fourthly,although G20 is regarded as the primary forum of global economic governance,the effect of macroeconomic policy coordination is unsatisfactory in the asynchronous business cycle.Fifthly,the building of G20 long-run coordination mechanism depends on the establishment of coordination mechanism,the members' participating in agenda setting and the interaction with other international organizations or countries.Finally,China's active participating in G20 macroeconomic policy coordination is beneficial to both domestic and international economy.