关键词: 经济波动, 经济增长, 福利成本

Abstract: Based on Lucas(1987) model, this paper measures the costs of consumption volatility and the welfare gain of extra consumption growth before and after economic reform using the national consumption data. We show that the welfare cost of consumption volatility is not important before economic reform, while under a reasonable range of parameterization, the welfare gain from eliminating business cycle can be higher than that from extra 1% growth. In short, our results indicate that macroeconomic volatility has first order implications, the government should be more focus on economic stationary than increasing economic growth.

Key words: Business cycle, Economic growth, Welfare cost