Business Cycle Asymmetry in China:Evidence from Friedman's Plucking Model  

作　　者：Tingguo Zheng Yujuan Teng Tao Song 

机构地区：[1]Assistant Professor, The Wang Yanan Institute for Studies in Economics, Xiamen University, Fujian, China [2]Masters student, The Wang Yanan Institute for Studies in Economics, Xiamen University, Xiamcn, China [3]Assistant Professor, Institute of Economics, Xiamen University, Fujian, China

出　　处：《China & World Economy》2010年第4期103-120,共18页中国与世界经济（英文版）

摘　　要：Friedman＇s plucking model of business fluctuations suggests that output cannot exceed an upper limit, but it is occasionally ＂plucked＂ downward below trends as a result of economic recessions. This paper investigates China＇s business fluetuations using quarterly real GDP data for the period 1978 2009. Our results show some evidence supporting Friedman＇s plucking model. We find that a ceiling effect of real output exists, and that negative asymmetric shocks significantly affect the transitory component, which captures the plucking downward behavior during the recession. The results also suggest that the basic asymmetric unobserved component model is not appropriate for directly modeling China＇s real output because the business＂ cycle is inaccurately measured, but it works quite well when considering a structural break in the second quarter of 1992. The results reveal that although China＇s economy strengthened in the second quarter of 2009, it is essential for China＇s government to take further positive and effective measures to maintain sustainable development of the economy.Friedman＇s plucking model of business fluctuations suggests that output cannot exceed an upper limit, but it is occasionally ＂plucked＂ downward below trends as a result of economic recessions. This paper investigates China＇s business fluetuations using quarterly real GDP data for the period 1978 2009. Our results show some evidence supporting Friedman＇s plucking model. We find that a ceiling effect of real output exists, and that negative asymmetric shocks significantly affect the transitory component, which captures the plucking downward behavior during the recession. The results also suggest that the basic asymmetric unobserved component model is not appropriate for directly modeling China＇s real output because the business＂ cycle is inaccurately measured, but it works quite well when considering a structural break in the second quarter of 1992. The results reveal that although China＇s economy strengthened in the second quarter of 2009, it is essential for China＇s government to take further positive and effective measures to maintain sustainable development of the economy.

关 键 词：asymmetry business cycle plucking model REGIME-SWITCHING structural break 

分 类 号：F124[经济管理—世界经济] D630.1[政治法律—政治学]