Abstract: After the U.S. subprime mortgage crisis, the world's economic development ushered in a new cycle. At present, the current economic cycle is in the contraction phase, but its characteristics are very different from those of the past, specifically: economic growth is not enough momentum, the post-crisis economic recovery is slow, the economic contraction period is extended, and the global economic development has entered a new round of contraction process. In addition, at the beginning of 2012, China's macroeconomic growth rate fell below 8% again, marking the economic growth rate into the gear change period. Based on this, this paper adopts the TVP-VAR model to study the impact of world economic boom changes on China's real output growth from a dynamic perspective, and analyzes the effectiveness of current macroeconomic control policies in ironing out economic fluctuations. The results of the study show that the impact of the world economic boom change has only a short-term effect, and it is the inevitable trend of economic development in developed countries, while the correlation with China's economic transformation is weak, therefore, we should look at this issue rationally and still focus on our own development. Finally, from the perspective of the effectiveness of policy regulation, the choice of monetary policy to iron out economic fluctuations will face forward welfare cost constraints, while fiscal policy stimulus and moderate credit supply first have been more robust macro-control instruments.

Keywords: economic cycle; TVP-VAR; fiscal policy; monetary policy