Empirical Analysis On Economic Cyclical Changes In The Three Northeastern Provinces Of China

The three northeastern provinces of China- Heilongjiang, Jilin and Liaoning, are the old industrial bases and major grain producing areas of China. This area, as a whole, has rich resources and great potential for exploitation.. It has the advantages of comprehensive industry system, infrastructure facilities, abundant agricultural products, pleasant ecological environment and so on.The three northeastern provinces'modern industries started very early in China. This area has basically become an industrial base relying on the heavy manufacturing through the large scale reconstruction after the founding of China, and it played a very important role in the development of China. However, since reform and opening-up, especially since China has pursued the socialist market economy, the economic development has met unprecedented difficulties. Therefore, further investigating the cause of northeast-phenomenon and the factors which restrict the development here is of great importance to revitalize old industrial bases.To settle the problem above, this paper analyze several major macro-performance indicators of the three northeastern provinces of China since its founding, and study the volatility, comovement and causality of this area's economic cycle. This paper detrended the fluctuation of the macro-performance data through random walk filter, trying to find out the potential growth cycle and the major factors including the connection between them which affects the economic fluctuation of the provinces-Heilongjiang, Jilin and Liaoning, in order to offer some meaningful policy and suggestion.This paper is divided into five parts, excluding the introduction part:Part one, literature review. Introduced the economic cycle and the research status in both here and abroad.Part two, described the random walk filter, and represented the research approach-studying the general characteristics of the economic cycle by the volatility, comovement and causality of the overall features, including GDP.Part three, analyzed seperately the economic cycle changes of the three provinces.Part four, compared the results of the three provinces.Part five, drew a conclusion and offered some policy and suggestion.The innovation of this paper lies in one main point: the introduction of random walk filter. Using this to process data could result precise analyze.