The Impact Of Economic Uncertainty On Overcapacity

Since the reform and opening up,along with the development of Chinese economy,the problem of excess production comes to the surface gradually,which has seriously hindered the development of Chinese economy.To solve the problem of excess production is the important content to ensure the sustained and healthy development of Chinese economy,and also the important foothold of the supply-side structural reform of our country.In order to reduce overcapacity,the Chinese government has introduced a number of targeted policy measures,and at the central economic conference,the elimination of overcapacity was also listed as an important task.On the other hand,with the further deepening of reform and opening up,the economic development of our country inevitably suffers the impact of economic uncertainty,which will have an impact on the economic cycle,market risk,investment of enterprises,etc.,and have a certain impact on the capacity utilization rate of our country.Based on the above research background,this paper mainly analyzes the impact of economic uncertainty on our overcapacity from both theoretical and empirical aspects.In theory,the current research status of economic uncertainty and overcapacity is summarized by combing related literature.Then it analyzes the theoretical basis of economic uncertainty affecting overcapacity.In empirical aspect,this paper selects some indicators which can represent macroeconomy in our country,constructs high dimensional economic data set,and calculates the conditional variance as the index of economic uncertainty using the GARCH model after classification and extraction of common factors.Based on this,high frequency and low frequency explanatory variables,such as technological innovation,export and financial development level,are introduced to construct a mixing model of capacity utilization rate and economic uncertainty index.In the univariate mixing model,full sample estimation and in-sample prediction are carried out,and real-time prediction is carried out.In the multivariate mixed frequency data model,whether economic uncertainty index is introduced to analyze whether the introduction of economic uncertainty will have an impact on the study of capacity utilization rate.The above research results show that:(1)Economic uncertainty has a significant impact on overcapacity.Economic uncertainty will affect enterprise investment plans,intensify market risks,affect economic cycle and consumer consumption,and then have an impact on overcapacity;(2)The mixing model is established with the economic uncertainty index as the high frequency explanatory variable.When the baseline prediction period is small,the mixing model has a comparative advantage compared with the baseline model,and this comparative advantage gradually disappears with the advance of the baseline prediction period.(3)The comparative advantage of the multivariable mixed frequency data model with the addition of autoregressive item is generally better than that of the model without the introduction of autoregressive item.Meanwhile,the comparative advantage of capacity utilization prediction is more obvious after the addition of economic uncertainty index.In a word,the combination of economic uncertainty index and mixing model provides a new way to study the impact of economic uncertainty on China’s capacity utilization rate and resolve overcapacity.Real-time forecast of capacity utilization rate can help the industry and the government make timely adjustment measures to cope with the phenomenon of overcapacity.Some enlightenments can be obtained from the above conclusions:(1)Reducing excessive government intervention is an effective way to improve capacity utilization;(2)Improving the technological innovation ability of enterprises is an important means to solve the problem of overcapacity;(3)Strengthening self-construction is an effective means to improve the utilization rate of production capacity;(4)Improving the market mechanism is an important way to eliminate backward production capacity.