Research On The Impact Of Household Borrowing Constraints And Labor Market Friction On Government Spending Multiplier

Government spending policy as one of the important tool of national regulation economy,and the effectiveness of policy implementation problems are governments and scholars focus on the problem over the years.But in the 21 st century,especially the sub-prime mortgage crisis in 2008,and European sovereign debt crisis in 2011,the world's major countries' financial status became increasingly strained due to excessive spending and debt accumulation,the mass expansionary government spending of promote economic recovery or stimulate growth is to little effect,it has not produce policymakers have expected economic prosperity,even a more serious economic losses,and trigger the government spending multiplier morass.How to solve this dilemma,explore the key factors influencing the government spending multiplier,has become an extremely urgency topic of economics research.Meanwhile,in china,Household credit policy gradually loosened the strictures,the transition of the household borrowing constraints from high borrowing constraints in the past to low borrowing constraints,household debt scale has maintained a growth trend,and the labor market is in high friction state.Therefore,in the current economic context,to examine the government spending multiplier effect,and search for the cause of the government spending targets inconsistent with the actual effect,household borrowing constraints and labor market friction are two cannot be ignored important factors.Given all this,this paper adopts literature research,comparative analysis and the combination of theoretical analysis and empirical analysis method,investigate the impact of household borrowing constraints and labor market friction on government spending multiplier.First of all,this article expounds household borrowing constraints theory,the theory of labor market friction and the government spending multiplier theory,and construct household borrowing constraints and labor market friction influence government spending multiplier effect mechanism;Secondly,using the empirical data to carry out a descriptive analysis of household debt state,employment situation and government spending,and using simple VAR model to explore household debt,employment and the dynamic relationship between and among government spending;Moreover,build a contains household borrowing constraints and labor market friction dynamic stochastic general equilibrium model,under Bayes estimate and calibration of model parameters premise,and through to imposed different constraints about the parameters(2?,0m and2?),and to set five kinds of situations,under different situations,analysis of the household borrowing constraints and the labor market friction influence on the government spending multiplier;Finally,summarized in this paper,the main conclusions of this study,and put forward the corresponding policy recommendations.Using the quarterly data from the 1st quarter to the 4th quarter of 2015,and using loan to value ratio and vacancies matching elasticity reflect to the size of household borrowing constraint and the level of labor market friction in a given period of time,this paper analyze the impact of household borrowing constraint and labor market friction on government spending multiplier through a New Keynesian dynamic stochastic general equilibrium(DSGE)model contains household borrowing constraints and labor market friction.The research show that:(1)household borrowing constraints and labor market friction can through affect household borrowing behavior and household employment behavior to affect the level of household debt and household economic,and then reduce or enlarge the multiplier effects of government spending impact on the main macroeconomic variables;(2)The household sector's borrowing and labor participation behavior,the government's spending behavior,the corporate sector's production behavior and banking sector's currency on the behavior possess the dynamic relations of the long-term equilibrium;(3)Household borrowing behavior has an important effects on dynamic effects of government spending shock,and the government spending multiplier's absolute value smaller would result from omitting household borrowing behavior,but numerical notation remains the same;(4)In the combination mode of different levels of household borrowing constraints and labor market friction combination,there is a certain degree of difference in Measuring government spending multiplier;(5)The change of household borrowing constraints in the economy with a high labor market friction has a greater and obvious influence on government spending multiplier than those in the economy with a low labor market friction.The main contribution of this paper:(1)Overcome the limitation about the existing research from the macroscopic angle of view to seek the factors which influence the size of government spending multiplier,from microscopic family economic behavior perspective,this paper give a new microscopic explanation of the cause of the government spending multiplier effect in trouble.(2)Based on heterogeneity characteristics considerations,to include household borrowing constraints,and labor market friction in analysis the theoretical framework of the government spending multiplier,make up the domestic research about government spending multiplier model and method.(3)In order to achieve the control target of government spending policy,and strive to get out of government spending multiplier morass provides a new train of thought and method,has the important practical significance.