Studies On The Financial Shock Transmission,Business Cycles And Effectiveness Of Monetary Policy

After the US financial crisis,the world economy has become more volatile,with frequent economic shocks and much greater uncertainty in economic operations.With the continuous improvement of China's overall economic strength,China's ability to withstand financial shocks and other external shocks has been constantly enhanced.Entered the New Normal and the new economic era,China's macro-control adhere to seek improvement in stability overall tone,always with high quality development as a strategic goal,on supply side structural reforms to the main line,there is a synergy with the regulation policy systemization,collaborative,comprehensive control of differentiation,in the "macro policy and industrial policy should be accurate,policy to live,the reform policy to real,social policy to the palm" of macroeconomic regulation and control,realize the stable development of economy and rapid growth.At the same time,we need to note that against the backdrop of increasing volatility in global financial markets,financial stability is playing an increasingly important role in promoting the real economy.Financial fragility and financial speculative attacks are increasingly the trigger for economic cycle fluctuations.Therefore,the implementation of macroprudential policies is increasingly adopted by the central banks of various countries,and counter-cyclical regulation and government intervention have become the general state.However,in the context of the increasingly volatile global financial markets,the role of financial stability in promoting the real economy is increasingly important.Financial fragility and financial speculation have increasingly become the trigger for economic cycle volatility.Therefore,the implementation of macro-prudential policy is increasingly adopted by the Central Banks of all countries.In this context,this article examines the dynamic correlation between financial shocks,economic cycles and monetary policy.This paper analyzes the history of the research on financial shocks,discusses the interdependence between financial friction,financing constraints and investment decisions and the theory of financial accelerator,the theory of financial crisis and the pro-cyclical nature of financial shocks.At the same time,The transmission mechanism of policy has been systematically sorted out.On this basis,the impact of financial shock on real output,the impact of financial shock on the rules of monetary policy and the effectiveness of monetary policy,the interaction mechanism of financial shock and financial friction,economic fluctuation and the related mechanism of financial shock and macro-prudential policy are launched A series of empirical analysis.By constructing a time-varying coefficient vector autoregressive model,a mixed data model and a dynamic stochastic general equilibrium model with stochastic volatility,we analysis the impact of financial shock on the real output,the impact of financial shock on the implementation of monetary policy,the impact of financial shock and economic cycle,and get a series of valuable conclusions.First,it has been found that financial shocks can indeed have a lasting and significant impact on real output with the effect of amplifying economic fluctuations and is related to specific economic stages.At the same time,the financial shock will bring some pressure on inflation in the short term,but it will have some restraining effect or even deflation in the long run.The new normal,as a representative time node,shows different economic characteristics from any previous period.Secondly,we estimate the Mc Collum Rule and the Taylor Rule under the financial impact by constructing a mixed vector autoregressive model and find that the regression equation of the mixed vector autoregressive model under Bayesian mixing algorithm(BMF)reduces the variance of the high-frequency data density function and tends to produce a more accurate covariance matrix.At the same time,the financial shocks have a certain degree of impetus for inflation,while the output shows a strong impact in the short term.This may lead to fluctuations in the economy and economic stability.However,in the long run,the financial reaction will be weak.There is no obvious pulling effect on output growth.Third,the DSGE model with financial and financial shocks can well fit our current economic situation.By analyzing the impulse response function of financial impact on endogenous variables under different financial friction coefficients,it is found that when the financial friction coefficient is small,the deviation of endogenous variables from the steady-state value will be magnified.In addition,the financial shock shows a strong lag,that is,the endogenous variable rises rapidly but declines slowly after the impact,which shows that in the presence of financial friction,the financial shock does not only have a short-term impact on the real economy,but will have a long-term impact on the real economy.Fourth,by constructing a DSGE model with financial shocks in the real estate market,we examine the changes and dynamic effects of the macroeconomic,financial systems and social welfare in the face of financial shocks.It is found that under the financial impact of the real estate market,the government is faced with the "binary paradox" of stabilizing real estate prices and maintaining output growth.That is,if the government considers stabilizing the real estate prices,it will sacrifice its output.If it is to maintain its sustained growth,the real estate market may be unstable.The above research confirms the existence,infectivity and riskness of financial shock in China's economic operation.Financial shock induces financial cycle,which is related to business,and then affects the real effects of monetary policy.How to study the relationship between real economy and virtual economy,test and identify the effectiveness of monetary policy tools and targets,has important theoretical inference and empirical evidence support,and provides an important reference for the formulation of effective macro-control policies.