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The Analysis Of Irrational Behavior On The Economic Fluctuations In China

Posted on:2011-10-12Degree:MasterType:Thesis
Country:ChinaCandidate:J WangFull Text:PDF
GTID:2309330452461407Subject:Western economics
Abstract/Summary:PDF Full Text Request
Business cycle has been a major area of study in Macroeconomics. Since themid-20th century,80years, more and more scholars began to study the Businesscycle in China and achieved rich results. However, our analysis of economicfluctuations are mostly applied to Western economic theories and methods, andalso there has not been a study about the fluctuations in individual behavior onthe economy in our country yet, that mean there is not many people makeirrational behavior as the reason of the economy fluctuations from the microscopicpoint of view.So, first of all, this paper sorted the theory of economic cycles in domestic andforeign scholars, found there have a study of the micro-psychological point of view,but there is no research from the view point of irrational behavior. Secondly, thepaper also consolidated the development of rational hypothesis and boundedrationality hypothesis, and then summarized the factors that affect the irrationalbehavior, as well as defined irrational behavior. Again, this paper analyzes howinvestment and consumption affect economic fluctuations based on theKeynesian theory of effective demand, application of ADF test, Johansenintegration analysis, Granger causality test and least-squares method to study thestability dynamic equilibrium in the long-term between Investment, consumptionand economic fluctuations in China. Finally, focus of this article, analysis of howirrational behavior affect the economic fluctuations. This paper build a modelwhich small investors imitate big investors to analyse irrational behavior affect theInvestment; and build a model which irrational factors affecting consumer todescribe how irrational consumption behavior is happened.The main conclusions of this paper are:(1) irrational investment behavior andirrational consumption behavior is an objective existence. In this paper, we useHerding Behaviors in China and Consumer Credit in Subordinated Debt LoanCrisis in the U.S. as empirical examples according to herd behavior amonginvestors and non-rational consumption model of consumers.(2) Irrational behavior on the impact of the four stages of economic fluctuations in China istwofold: When investors and consumers of irrational behavior with the normalinvestors and consumers of business cycle are in the same direction, the impactof the stage of depression, prosperity and recession are negative, the impact ofthe recovery phase is positive; When investors and consumers of irrationalbehavior with the normal investors and consumers of business cycle are in theopposite direction, the impact of the stage of depression, prosperity and recessionare positive, the impact of the recovery phase is negative.
Keywords/Search Tags:Business Cycle, Non-rational behavior, Theory of effective demand
PDF Full Text Request
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