The Study Of The Cycle Fluctuation Of Fixed Assets Investment And Its Affected Factors

There are three factors, investment, expenditure, imports and exports, which affect the economic development of our country. In these three factors, expenditure always keeps a smooth path of change. And with the international financial crisis and the fierce international competition, the boost to economic growth of imports and exports decreases step by step in these years too. But investment has greater volatility and it shows more influence on the macro-economic fluctuations. Thus investment has been one of the most important factors which affect the macro-economic fluctuations of our country. And regulating investment has become one of the main policies of macro control. As one kind of investment, fixed assets investment has a higher construction rate in the real economy. And it has a greater influence on overall economic output. Therefore, it is very significant to research the cycle characteristics of fixed assets investment, its effects to the overall economic output as well as the characteristics of the effects. All of them will make sense to formulate sound macroeconomic policies.In this paper, fixed assets investment is the object of study. Its time series has been decomposed into business cycle, determinant trend as well as stochastic trend in B-N decomposition. And then, I analyzed the relationship between fixed assets investment and cycle components under B-N decomposition. I also analyzed the long and short term relationships between investment in the fixed asset and economic development with vector error correction model, impulse response function and analysis of variance. At last, I tested the co-integration relationship between fixed assets investment and its effect factors with autoregressive distributed lag error correction model and bounds test. And the results of their long run co-integration and error correction model have also been analyzed based on autoregressive distributed lag model algorithm.The main conclusions of this paper are as follows:1. There is obvious cycle characteristic in the fixed assets investment of our country. Deterministic trend and stochastic trend are also obvious and stochastic trend has a bigger share. 2. The cycle components of the fixed assets investment are similar to the economic cycle components based on B-N composition. And the economics fluctuation and the fixed assets investment both have long run co-integration; the fluctuation of the fixed assets investment will have a strong influence on the fluctuation of economics. 3. Monetary factor, financial factor and stock market have long run co-integration with the fixed assets investment too. And loose monetary policy will promote the growth of fixed assets investment. However, proactive fiscal policy has the crowding out effect to fixed assets investment. In additional, the development of stock market has a negative effect to the fixed assets investment of our country.On the basis of the empirical conclusions of this paper and the real situation of economic development of our country, the paper provide some suggestions of policy: First, the government should use the fixed assets investment as an intermediate goal of macro control, and arrive the target of controlling economics finally. Second, the cycle of investment in fixed assets compared to the economic cycle has a period of pilot, so the government should pay much attention at the trend of investment in fixed assets and utilize it as a leading indicator of changes in the economic cycle. Third, government should attach great importance to the emergence of a variety of uncertainties, and guard against various natural crises and financial crisis. The government also should construct a stable economic and political situation at home and abroad, and further improve the market economic system in China. If using fixed assets investment as an intermediate goal of macro control, the government should utilize more monetary policies and less financial policies. What is more, our country should perfect the capital market especially for the stock market, which needs to be steady under the macro control.