ZHANG Tongbin, GAO Tiemei:Research on the Phase Characteristics and Driving Mechanism of Chinese Business Cycle Fluctuation——Empirical Analysis Based on MS-TVTP Model

Abstract：Based on the Keynesian IS curve and MS-TVTP model, this paper studied the phase operating characteristics and driving mechanism of Chinese business growth cycle fluctuation by specifying output gap series through coincident composite index and estimating expectation variable through state space model.The results are that the influences of output gap expectation on business growth cycle are positive and the effects of real interest rate are negative.Both of them exert asymmetric features in different regimes.The estimation results of smoothed probability and transition probability show that the financial and investment composite indexes are the significant driving factors of business growth cycle switch among different regimes.Compared to promoting economic growth, the monetary policy plays a more effective role in decelerating the growth speed.Although the speed of investment's influence during the economic downturn phase is rapid, the lag of its effects is lengthened due to the investment cycle and capital formation.Releasing reform dividend through stabilizing expectation and reducing the fluctuation of business cycle by employing the macro prudent government are important ways to maintain the steady growth of Chinese economy.

Key words： Business Growth Cycle    Output Gap    Driving Factors    MS-TVTP

source:Finance & Trade Economics ,No.1,2015