Fiscal and monetary policy interaction in the period of Europe's sovereign-debt crisis: an open economy DSGE model linking Euro area and China Online publication date: Sat, 30-Aug-2014
by Lin Zhao; Jiawei Zhang; Guihuan Zheng
International Journal of Society Systems Science (IJSSS), Vol. 4, No. 4, 2012
Abstract: European debt crisis might produce important influence on China via trades and capital flows since European Union is the largest trading partner of China. Especially, it has attracted more and more attention about the fiscal and monetary policy interactions between the Euro area and China in the period of Europe's sovereign-debt crisis. In this paper, an open dynamic stochastic general equilibrium (DSGE) model for China and European Union economy is developed to research this issue. The sufficient important shocks are considered in this model for policy simulation. It can be used to analyse the impact of different shocks to the output, the policy interactions between European Union and China and the transmission path of one specific shock. The empirical results showed some contributions of the surplus of China's foreign trade, the crowd out effect of one country's government expense and the international effect of exchange rate fluctuations.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Society Systems Science (IJSSS):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com
Our Blog 
Follow us on Twitter 
Visit us on Facebook