Fiscal and Monetary Policy Cross-cyclical and Counter-cyclical Regulation Effect Study from the Perspective of Financial Stability
Cross-cyclical and counter-cyclical regulation has become crucial for China's economy to achieve stable growth and prevent risks.Two key issues are the effectiveness of regulation and how to coordinate with it.In this paper,based on the TVP-FAVAR model to measure China's financial stability,we identify the financial stability cycle through the CF band-pass filtering method and the turning point method and combine the TV AR model and the TVP-VAR model to focus on the regulatory effects of China's fiscal and monetary policies on the counter-cyclical and cross-cyclical regulation of financial stability.We find that China's financial stability has experienced five rounds of cyclical fluctuations,showing the characteristics of"fast aggregation and slow ablation"of risks.We also find that in the stage of deterioration of financial stability,macro policy can effectively calm financial risks,and in the stage of financial improvement,macro policy can also prevent financial overheating,and both phases reflect the importance of counter-cyclical regulation and control of financial stability.Moreover,the implementation of fiscal policy and monetary policy is homogeneous,and macro policy clearly prefers cross-cyclical regulation after 2017,and the regulatory effect increases yearly.Accordingly,we propose a realistic scenario for coordinating cross-cyclical and counter-cyclical fiscal and monetary policies,and provide valuable insights for maintaining financial stability and promoting the organic combination of cross-cyclical and counter-cyclical macroeconomic regulation.
万方数据
维普
