Abstract

In this paper, we attempt to study quantitatively the effects on macroeconomics due to different shocks. The
interactions between different shocks are the major subjects. Furthermore, the dynamics of shocks, i.e, the time
evolutions of shocks, and the propagation of shocks are studied in detail by using the quantitative models. The
approach of this paper can be applied to any economic shocks, particularly, price shocks, technology shocks,
unemployment shocks, and outer capital flow shocks. As an example, we investigate the interaction of price
shock and exchange rate shock. At the same time, we also discuss the macroeconomic policy’s effects on
economic business cycle.

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