Home >> Working Paper
How Much is the Deviation between Fictitious Economy and Real Economy in the World?
Read        DownLoad
TitleHow Much is the Deviation between Fictitious Economy and Real Economy in the World?  
AuthorSu Zhi,Fang Tong and Xu Shudan  
OrganizationCentral University of Finance and Economics ;  
Key WordsFictitious economy; Real economy; DSGE model; Multiplier effect; Financial accelerator 
AbstractThrough building up DSGE model with financial accelerator and contract term, this paper brings out a new method for measuring deviations between fictitious economy and real economy. This method calculates output and investment multiplier based on IRFs and brings about deviation index which reflects differences in economic structure and resources statues. We find that short-term deviation is not related to the development of the countries, the deviations are common among all the countries under monetary policy. In long-term, deviations in developed countries are lower than developing countries, which means that the two kind of economies have smaller fictions and higher flexibilities, deviations in developing countries are higher, the two kind of economies have bigger fictions and lower flexibilities. Due to the faster growth and the limitations on fictitious economy, China has the lowest deviation, and it has great potential. The developed countries should prevent serious deviations; the developing countries should balance the regulations and free development, improve the restrictions in credit, fix the twist in price and capital, and push the financial reform forward, decrease the transmission fictions and increase the flexibilities between fictitious economy and real economy, realize the coordination between them.  
Serial NumberWP1033 
  • Institute of Economics, Chinese Academy of Social Sciences
  • Copyright Economic Research Journal
  • The uploaded articles by this website express the authors’ views, not necessarily the views of this website.
  • Perennial Legal Counsel: Lu Kang (Chong Guang Law Office)
  • ISSN 0577-9154 CN 11-1081/F Postal Distribution Code 2-25l (Domestic) M16 (Overseas)
  • ICP 10211437 (Beijng)
  • No.2,Yuetan Bei Xiaojie, Xicheng District, Beijing 100836, P. R. China
  • Phone/Fax: (+8610) 68034153