Welfare Costs Of China's Economic Fluctuations Under Heterogeneous Preference

This paper mainly focus on the welfare cost of China's economic fluctuations,which is an important issue concerned by current macroeconomists.The paper put this topic in the framework of dynamic general equilibrium model,at the same time introduce the assumption that the consumers have heterogeneity in the model.The result show: under the heterogeneous preferences,the welfare effect of economic fluctuations between different preference consumer is very small,the results follow Lucas claims;At the same time,the paper finds that heterogeneous preference can explain the income gap.The first chapter points out the background and significance of the topic and defines some key concepts.In chapter 2,the paper introduce the research progress of the welfare cost of economic fluctuations.In the third chapter,the welfare effect of economic fluctuation is analyzed under the framework of dynamic general equilibrium model,and calculated the compensation parameters ?.The fourth chapter is the calibration of the relevant parameters and numerical simulation.The fifth chapter,the model is extended to take into account the heterogeneous preferences,so that the model has a better micro foundation.The sixth chapter analyzes the relationship between the heterogeneity of consumers' time preference and income gap under the framework of DSGE.The main innovation point of the paper displays in: 1.from the perspective of heterogeneity on the welfare cost of economic fluctuations,make it have better microscopic theoretical basis,the development of advanced the theory of depth of the original work.2.The qualitative conclusion of the paper shows that under the dynamic general equilibrium model,the economic fluctuation leads to the small welfare loss of individuals with different time preferences,which still follows Lucas' conclusion.3.Heterogeneous preference has a good fitting effect on consumers' income gap.This conclusion can provide suggestions for solving the income gap among residents in China.