In this paper, we design two chapters to discuss trade dynamics with heterogeneous fluctuations, contributing new insights to macroeconomic issues related to international trade. In the first chapter, we model general exchange rate fluctuations through stochastic processes and analyze the impact of heterogeneous price shocks on export competitiveness. We find that monetary policy and innovation both show positive effects on export trade, while monetary policy stabilizes exchange rate fluctuations to comprehensively boost provincial export competitiveness, innovation reduces its reliance on exchange rate mechanisms. The optimal policy according to exchange rate fluctuations aims to solve the wealth distribution of exporters, and it suggests that optimal policy should promote dynamic transitions in trade patterns rather than maintain existing comparative advantages in heterogeneous trade structures. In the second chapter, we model labor market fluctuations and the ability to utilize production factors through stochastic processes, and we analyze the impact of heterogeneous aggregate production shocks on general international trade. We find that labor market fluctuations only benefit international trade under the cooperation policy. Moreover, for both sanction and cooperation policy scenarios, positive shocks (i.e., shocks where average wage growth in the labor market exceeds unemployment) strengthen their impact on import trade while weakening their impact on export trade, and vice versa. Regarding the theories proposed in these two chapters, we prove them through empirical analyses using the provincial data of China.

We develop a model economy with active financial markets in which a policymaker's adoption of a gradualistic approach constitutes a Bayesian Nash equilibrium. In our model, the ex ante policy proposal influences the supply side of the economy, while the ex post policy action affects the demand side and shapes market equilibrium. When choosing policies, the policymaker internalizes the impact of her decisions on the precision of the firm-value signal. Moreover, financial markets provide a price signal that informs the government. The policymaker learns about the productivity shocks not only from firm-value performance signals but also from financial market prices. Access to information through both channels creates strong incentives for the policymaker to adopt a gradualistic approach in a time-consistent manner. Smaller policy steps yield more precise information about the productivity shock. These results hold robustly for both exogenous and endogenous information models.

Taking the prevalence of the global green development concept and China's green credit development practice as the background, this paper constructs a theoretical model analysis framework with the incentive policy of green credit as the entry point. First, the impact effect of green credit incentive policy is examined using the BVAR model. The results show that the green credit incentive policy suppresses the output level in the short run through the financing constraint channel, but has a positive contribution to output in the long run due to the adjustment of the production structure and the dynamic adjustment of green investment and R&D. Next, the paper constructs a DSGE model embedded with green credit fiscal and tax incentive policies, which explains the impact mechanisms and comparative effects of fiscal and financial policies driving green credit. The model shows that the re-guarantee policy is the most effective and consensual green credit incentive policy. In terms of the policy combination, the combination of the re-guarantee policy and the income tax policy is the current optimal policy pairing, and its policy is able to produce an amplification effect through the balance sheet channels of commercial banks and enterprises at the same time. In addition, a certain intensity of the above policy combination not only can effectively increase the scale of green credit, but also does not produce significant negative shocks to output and inflation. In summary, the findings of this paper provide a useful reference for the formulation and implementation of green credit incentive policies.

We consider the optimal intertemporal consumption and investment policy of a CARA investor who faces ¯xed and/or proportional transaction costs when trading multiple stocks. We show that when the stock returns are independent, the optimal investment policy in each stock is for the investor to keep the dollar amount invested in the stock between two constant levels and upon reaching one of these thresholds, to trade to the corresponding optimal targets. An extensive analysis of the optimal policy is conducted. This analysis reveals the signi¯cant relevance of transaction costs to the predictability and trading volume literature. We also obtain some seemingly counterintuitive results. For example, conditional on positive investment in a stock, as transaction costs increase, the average amount invested in the stock increases.