The Impact Mechanism of Non-Economic Policies on Social and Investor Disagreement in China: A Dual Analysis Based on Empirical Evidence and DSGE Models

Abstract

This study investigates the integration of non-economic policies into the framework for assessing macroeconomic coherence as applied by the Chinese government, with a particular focus on green policies. We examine the impact of non-economic factors on social disagreement and investor disagreement (expectations), and how these influences interact with macroeconomic regulation, employing both empirical evidence and dynamic stochastic general equilibrium (DSGE) theoretical models. In the basic analysis section, we merge statistical data on social divergence with policy implementation, utilizing multiple regression and deep neural network models. Our findings provide direct evidence that non-economic policies significantly regulate social sentiment. Additionally, theoretical analyses using contagion models, grounded in real textual data on social and investor divergence, demonstrate that expectations of social sentiment can ultimately affect economic variables. In the extended analysis, we enhance the classic DSGE model to delineate the pathways through which non-economic policies impact the macroeconomy. Drawing from our analyses, we propose specific optimization measures for non-economic policies. The results indicate that targeted policy optimization can effectively manage social disagreement, thereby shaping expectations and harmonizing non-economic with economic policy initiatives. This alignment enhances the coherence of macroeconomic policy interventions. The innovative contribution of this study lies in its provision of both theoretical and empirical evidence supporting the formulation of non-economic policies for the first time, alongside specific recommendations for improving the consistency of macroeconomic policies.