On the Welfare Cost of Business Cycle in China:An Alternative Perspective
提出新模型重新估算中国商业周期的福利成本，发现其远高于传统卢卡斯模型的结果，且稳定政策的主要收益来自降低严重衰退概率而非平滑正常波动。
This paper reconsiders the welfare costs of China's business cycles in an economy with a low probability,serious recessionstate in consumption growth.By applying of the new model to China's economy,we have come to:(1)The welfare costs of economic fluctuations are much higher than the results estimated by Lucas's model.Under reasonable parameters,the former may generally be about 10 times the latter.Hence,as far as the Chinese economy is concerned,the welfare gains of macro-stabilization policies aimed at preventing the emergence ofserious recessionstate will considerably be large.This conclusion provides a theoretical basis for the implementation of current stabilization policies in China.(2)As to the Chinese economy,the welfare gains obtained by reducing the probability ofserious recessionstate from 0.017 to 0.003 are around 3 or 4 times the results calculated by Lucas's model.It shows that the gain of stabilization policies in China comes mainly from decreasing the probability ofserious recessionstate rather than from smoothing economic fluctuations in the normal sense.(3)Within the range of relative risk aversion coefficient(less than 6),the welfare costs of economic fluctuations in China are very close to those in the U.S.It shows to some extent that the new model is applicable to different economies.