China’s Fiscal Multipliers and Business Cycle
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| Title | China’s Fiscal Multipliers and Business Cycle
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| Author | Chen shiyi and Chen Dengke |
| Organization | Fudan University |
| Email | shiyichen@fudan.edu.cn；13110680005@fudan.edu.cn； |
| Key Words | Fiscal Multipliers; Business Cycle; MCMC Method |
| Abstract | Overcoming the deficiency of current models and conveying more precise monthly output data, this paper employs a new model to investigate the fiscal multipliers of China and exploits the relationship between fiscal multipliers of China and business cycle for the first time. We further estimate the fiscal multipliers of different time points during the sample period. The results indicate that: (1) The average fiscal multiplier of China is 0.64, which is generally lower than developed countries; (2) China’s fiscal multipliers are strongly counter-cycle, the multipliers in recessions are 2.3 times as many as the ones in expansions; (3) During the 1998 and 2008 financial crisis, China’s fiscal multipliers are significantly higher than other periods, around the Party Congress year the fiscal multipliers are much more fluctuant; (4) The fiscal multipliers of state owned economy are less than those of the whole economy; (5) The timing of launching fiscal stimulus plan is extremely critical. |
| Serial Number | WP940 |
| Time | 2015-10-27 |
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