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다국어 초록 (Multilingual Abstract)

Economists disagree about the effectiveness of monetary policy and the necessity of government intervention. Classic economists, such as Adam Smith advocated a complete market so there have no use of monetary policy and government intervention. Keynesian economics emerged with propositions of government intervention and the utility of monetary and fiscal policies. New Keynesian economics modified real business cycle model, adding nominal rigidities, various shocks and frictions, incomplete markets, and so on, to construct a dynamic stochastic general equilibrium (DSGE) model, which clarifies monetary policy non-neutrality in the short run.
The DSGE model has become the most widely used model for macroeconomic analysis, emphasizing Keynesian economics. Many central Banks use the DSGE model as an important reference when implementing monetary or fiscal policy. The People’s Bank of China implements monetary policy to regulate and promote economic development. Hence, it is extremely meaningful to figure out the dynamic effects of monetary policy shock in China as a reference for Chinese monetary authority.
In the paper, a small open dynamic stochastic general equilibrium model was used to present the dynamic effects of monetary policy shock on the Chinese economy. Some important parametric values were estimated using a Bayesian approach, leveraging quarterly Chinese macroeconomic data representing real output and inflation from January 1992 to 2018.
According to the model, a negative monetary policy shock in the home country drops interest rates below their steady-state value and expanded the interest-rate gap during the first period, whereas the interest rate gap reduced and reverted to the zero steady state in the end. The negative monetary policy shock had a negative effect on the output, labor, inflation, wages, and consumption, dropping them below their steady-state values. However, the negative monetary policy shock had a positive effect on net exports, sending it above its steady-state value.
A negative monetary policy shock of the world economy has negative effects on the output, net export, labor, real wages, and consumption, causing these variables to fall below their steady-state values. A negative monetary policy shock has a positive effect on inflation, causing it to rise above its steady-state value during the initial periods. However, inflation quickly drops below its steady-state and reverts to a steady-state in the end.

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참고문헌 (Reference)

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