The Trend-cycle Decomposition Of China's GDP And The Price Effect Of Output Gap

Since China's economic development has gradually entered a new normal state,and not domestic but also international environment has become more complex,the study of China's economic running rules is particularly important.This paper summarizes the relevant literature of economic cycle decomposition model and the Price Effect of China's Output Gap.This paper also summed up the history of the development of economic cycle theory.In the trend-cycle decomposition model,because of the advantages of Flexible Fourier form(FFF),this paper introduce the FFF into the trend function of UC model to get FFF-UC model.FFF-UC has made a trend cycle decomposition of China's GDP from 1997Q1 to 2016Q3.By analyzing the turning point and the ability of output gap to predict inflation of URUC and FFF-UC model,the FFF-UC model has a certain advantage for the trend cycle decomposition of quarterly GDP in China.Therefore,this paper chooses the FFF-UC model to carry out the trend cycle decomposition of China's GDP.The price effect of the output gap is the relationship between the two economic goals of economic growth and price stability.In this paper,the Gordon model is used to study the output gap effect of China's consumer goods and capital goods.Study found that:(1)During the sample period,China has experienced nine economic cycles.China's economy fluctuates frequently,but the rate of cyclical fluctuations has declined since 2010.From the first quarter of 2016 began in the economic cycle of the downlink stage.(2)Both consumer and capital goods prices have positive price inertia.For the supply of shock factors,relative to the price of consumer goods,capital goods prices are more sensitive to changes in crude oil prices.There is a slight difference in the price effect of the output gap on consumer goods and capital goods.On the whole,the price of capital goods is more sensitive to the output gap.