Macro-impacts of oil shocks and fiscal policies: Study on a General Equilibrium model with financial sector and real sector

As Chinese economy system has been depended more on the import of petroleum with the development of China, the change in the price of international oil have caused concern among economists and policy maker. This paper is to present a Financial Computable General Equilibrium (CGE) model of the Chinese economy which integrates real and financial sectors, and to apply it to quantitatively evaluate the impacts on Chinese economy caused by international oil price changes. And the model endogenously determines the exchange rate, covering fixed, partially flexible, and completely flexile exchange rate system to consider the effect of foreign oil price changes from the point of view of macro and industrial aspects. Finally, this paper presents concluding remarks.