| Economic fluctuations have always been one of the hot issues in macroeconomics.The ups and downs of the economy will result in inefficient allocation of resources,a decline in the level of people’s welfare,and even serious political turmoil.How to iron out the economic fluctuation is an important subject for policy makers and economists.At present,the mainstream theories of economic fluctuation are RBC theory and Neo-Keynesian theory.What they all have in common is the use of dynamic stochastic general equilibrium(DSGE)model to analyze economic volatility.The political factor is an important factor which can not be separated when studying the economic problem in China,so we need the political business cycle theory to do the theoretical support when studying the economic fluctuation.At present,a set of relatively complete political business cycle theory has been developed in foreign countries,and a political business cycle model has been built from the five elements of voters,political parties,economic structure,impact and ruling ability.Then the basic assumption of this model is the political business cycle caused by the multiparty system election.This bottom assumption does not accord with the reality of our country,which leads to the lack of applicability of the existing western political and business cycle model in our country.Domestic political and business cycle studies are mostly based on the promotion efforts of local government officials as the starting point of empirical research,there has not been a systematic theoretical model.By combing the political model of our country and summing up the existing domestic research,this paper puts forward that the change rate of the local government officials is the proxy variable to measure the political cycle.Then,the political business cycle model under the framework of actual business cycle theory is established by using DSGE analysis method,and the model parameters are estimated by using Bayesian method.The model after Bayesian estimation can fit the real economy well.Then we do impulse response analysis and variance decomposition to endogenous variables,and find that under the same conditions,political shocks have less persistence and influence on macroeconomic variables than technology shocks and government expenditure shocks.But in reality,the frequency and magnitude of political shocks are obviously larger than the other two shocks,so political shocks are an important variable in explaining macroeconomic fluctuations. |
