An Analysis of Co-movement and Asymmetry of Business Cycle Fluctuations in China

based on Chinese empirical data from the first quarter of 1992 to the second quarter of 2009, this paper adopts multivariate dynamic state space model with Markov switching to analyze the co-movement and asymmetry of business cycle fluctuations in China. The results show that China's economy operates in relatively stable since 1992, and co-movement is significant, but asymmetry is not obvious. Thus, it reveals characteristics and operation rules of business cycle fluctuations in China during this period, so as to provide some implications for China's macro-control policies.