The Spillover Effect Of The Fed's Interest Rate Hike On China's Output After The Financial Crisis

In 2008,the US subprime mortgage crisis broke out,triggering a global financial crisis.The world's major developed economies began to implement quantitative easing(QE)policies.The United States injected liquidity into the economy in the form of expansion of balance sheets,as the US economy improved.In October 2014,the Federal Reserve announced its withdrawal from the QE policy.A new round of interest rate hike cycle was launched in December 2015,and a new round of interest rate hikes in the US is still in progress.Due to the international reserve status of the US dollar,the direction of US monetary policy also affects the global economy.China is the largest emerging market economy.Since its entry into the WTO,it has become increasingly connected with the world.It is also an important trading partner of the United States and the largest creditor country.The Fed's interest rate hike will inevitably have a certain impact on the Chinese economy.China is in a critical period of industrial structure upgrading and economic restructuring.Under this background,studying the spillover effect of the Fed's interest rate hike on China's economy has important practical significance for resisting external shocks.Based on the traditional open economy macroeconomic theory,this paper empirically studies the spillover effect of the Fed's interest rate hike on China's output after the financial crisis using the TVP-SV-VAR model.On this basis,the analysis is based on two perspectives: overall output and industry output.In terms of the overall research,based on the theory of international currency spillover effects,the exchange rate and interest rate channels are used to deeply explore the impact of the Fed's interest rate hike on China's output after the financial crisis,and compare it with the previous interest rate hike.In terms of industry differences,according to the degree of national policy encouragement and The close degree of US trade selects the two industries of computer communication electronic equipment manufacturing and special equipment manufacturing to analyze the impact of US interest rate policy on different industries.Through empirical analysis,the following three conclusions are obtained: First,the Fed's interest rate hike has a negative spillover effect on China's overall output after the financial crisis;based on the analysis of transmission channels,the channel conduction path effects at different interest rate hikes vary.On the exchange rate channel,the interest rate start point in the fourth quarter of 2015 due to the increase in import costs as a negative impact,the latest interest rate hike in the fourth quarter of 2018 due to Sino-US trade war and other factors,the exchange rate transmission channel impact is not obvious;In the interest rate transmission channel,the impact was negative in the fourth quarter of 2015 due to the income absorption effect and the tightening of the credit environment.In the fourth quarter of 2018,the impact was negative due to the increase in income absorption effect,domestic capital outflow and unfavorable credit conditions.Second,there is a difference between the current round of interest rate hikes and the spillover effect of the previous interest rate hikes,mainly related to the domestic and international economic conditions,the degree of China's capital controls,and the degree of China's openness.Third,in the industry analysis,it is found that the impact of the US interest rate policy on different industries is different.As China and the United States are more competitive in the computer communication electronics industry,the Fed rate hike has a positive impact on the output of China's computer communication electronics industry;while the professional equipment manufacturing industry is not competitive,China's special equipment manufacturing technology has a high degree of external dependence,the Fed rate hike has a negative impact on China's special equipment manufacturing industry.