Research On Consumer Confidence, Monetary Policy And Economic Fluctuations Based On TVP-VAR

Under the expected effect of consumer confidence,how does monetary policy affect macro economy dynamically? Monetary policy plays an important role in stabilizing the economy and promoting economic growth.With the rapid development of behavioral finance,the relationship between consumer confidence and macro economy is attracting more and more attention.Since the financial crisis,China’s macroeconomic cycle has undergone significant changes,monetary policy transmission mechanism is more complex.In addition,with the development and change of China’s macroeconomic situation,the effect of monetary policy on macroeconomic regulation and control also has obvious time-varying characteristics.This paper firstly summarizes the theoretical basis and existing research basis,and proposes the household balance sheet channel of monetary policy transmission mechanism,which provides the basis for the construction of the following model.Then,this paper selects the monthly data of monetary growth rate,interest rate and exchange rate,consumer confidence,inflation rate and economic growth rate from July 2005 to December 2018,and constructs the VAR model to study the impact mechanism of monetary policy on macroeconomic fluctuations under the expected effect of consumer confidence.Due to the regulation of consumer confidence and monetary policy on economic fluctuations with time-varying characteristics,therefore this article finally to the mentioned using VAR model of index data,using reflect time-varying TVP-VAR model to study the characteristic of the expected effect of consumer confidence under the framework of consumer confidence and time-varying effect mechanism of monetary policy in macroeconomic fluctuations.The results show that under the expected effect of consumer confidence,monetary policy has a time-varying effect on macroeconomic regulation,and consumer confidence and monetary policy have different regulatory effects on macroeconomic objectives in different lead times and economic periods.From the perspective of time change: under the expected effect of consumer confidence,the influence of price indexes such as interest rate and exchange rate on macroeconomic fluctuation is mainly in the short term,that is,with short time delay and short action time,the price index can be flexibly used for macroeconomic regulation and control.Quantitative indicators(monetary growth rate)often have a long time delay and have a long-term impact on macroeconomic fluctuations.Whether in the short term or in the long term,the improvement of consumer confidence plays an important role in promoting economic growth.Through the expected effect of consumer confidence,monetary policy has an unobstructed channel for macroeconomic regulation and control,and consumer confidence is increasingly improved under the influence of monetary policy and macroeconomic fluctuations.