제목: A Small Open DSGE Model for the Chinese Economy


저자: 한광석


요약: 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.
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 April 2018.
According to the model, a negative monetary policy shock in the home country drops interest rates below their steady-state value, negatively effecting real output, labor, inflation, real wages and real consumption. However, this negative monetary policy shock affects net exports, sending the economy above its steady-state value.


JEL Classification: C51, E22, E30, E52
Key Words: small open DSGE model, Monetary policy shock, Chinese economy.