Analysis of Zhejiang Business Fluctuations with Dynamic Stochastic General Equilibrium Model - Innovative Management in Information and Production - page 83

Tabl e 3 The statistical properties of the simulated output in one shock

Tabl e 4 Granger causality relationships between the shocks

identification of the sources of volatility. During this period Granger causality test
also finds that labor shock has a significant ability to predict output, investment,
and exogenous demand. This fact convinces us that labor shock is another source of
output volatility during this period.
To sum up, we get the following conclusions: first, the main source of economy
fluctuations in Zhejiang is technological progress and labor shock. Second, exoge-
nous demand and investment has a small impact on the economy fluctuations in
Zhejiang.

Acknowledgements This paper is supported by Natural Science Foundation of Zhejiang Province
(LQ13G030006), Postdoctoral Science Foundation of China (2013M531436), Humanities and
Social Sciences Foundation of Ministry of Education (13YJC790213), National Statistics Research
Foundation of National Bureau of Statistics (2012LY016) and Higher Education Research

Foundation of Zhejiang Gongshang University (Xgy13006).

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