Study On Asymmetric Character Of Financial Accelerator And Its Policy Implications

There has long been a puzzle that the dramatic fluctuation of the whole real economy issometimes found driven by some tiny impact on economy. The explanation power of MMTheory and RBC theory for business cycles turns to be weak. Hence, after the hard workingof academicians, Bernanke et al proposed the theory of financial accelerator based onFisher’s debt-and-deflation theory. Financial accelerator is that the trivial impact oneconomy can be enlarged by the deficit of financial market. Since the process ofglobalization is goes deeper, and the financial market is developed rapidly all over the world,and each economy is more and more likely to be influenced by outer impacts.The premise under which that financial accelerator works is the asymmetric ofinformation in the credit market. Since the information is nonlinear in the market, theenterprises bear agency costs in the borrowing activities. The counter-cyclical externalfinancial premium and the cyclical net worth of enterprise, they work together to exaggeratethe external impacts.The character of financial accelerator is asymmetric, that is the economy fluctuatesmuch more dramatically in the phase of decline. At the same time, the small and mediumenterprises are much more affected by the external impacts by the mechanism of financialaccelerator. Different impacts show distinct effects on the economy.Based on TVAR model, this paper discusses the asymmetric of financial accelerator bydata starts from2000to2011. By generalized impulse response function, we not onlysupport the existence of financial accelerator in China, but also the asymmetric of financialaccelerator. No matter what kinds of impacts the economy confronted with, the effects turnto be greater under tightened credit. Simultaneously, the lasting of impact on economy ismuch longer while the credit market being loose. And we come to an point that the creditimpact contributed most to the fluctuation of economy, and then the monetary impact, priceimpact, fiscal expenditure impact, and finally the productivity impact. Finally, we offerseveral advices to shed some light on the policy making.