Research On The Impact Of Economic Openness To The Government Size

Macroeconomic situation reflects the level of economic development of a country or region. The development trend of the macro-economy not only affects the government policy, but the institutional and individual investment decision. Therefore, the accurate macroeconomic forecasting has important practical significance. Based on the historical data, macroeconomic forecasting is used to predict the economic situation by utilizing economics models. Currently, the macroeconomic forecasting technology has already have experienced a long period of development. From the very beginning, this technology only made qualitative forecast. Up until now, institutions including many economists, government agencies, academic institutions and commercial organizations are all beginning to use quantitative macroeconomic forecasting technology. By using econometric and computer technology, the accuracy of macroeconomic forecasting has been greatly improved.The development of macroeconomic forecasting model benefits a lot from the evolution of macroeconomic theory and computer technology. But through the history of the macroeconomic forecasting, few articles have been discussing systematically the economic theory basis. Most of the articles studied only the macroeconomic forecasting technology and the innovation. Therefore, this paper firstly summarizes the basic theories which are the rational expectations theory, the economic cycle theory, the general equilibrium theory and the non-equilibrium theory. Secondly, through the comparison between different technologies and methods, the suitable method was found to solve the macroeconomic forecasting problem in China. Finally, by analyzing the macroeconomic forecasting model development history and the actual problems in China, this paper promoted the idea that structured macroeconomic forecasting model should be utilized to solve the problems in China based on based on Keynesian economic theory.China’s structured macroeconomic vector model was initially developed by Shandong University Macroeconomic Forecasting Center in 2014. This model is based on the Keynesian economic theory. By using Bayesian statistical estimation technology, this model was used mainly to predict quarterly economic data. In summary, this model was developed on the basis of the Keynesian economic theory, time series and the China’s economic situation. The public release of quarterly economic data in 2014 was successful and the outcome was proved to reflect the actual economic trend. For this reason, this paper uses the model to predict the economic data in 2015. Policy suggestions were based on the outcome and the qualitative analysis.