Abstract: This paper investigates the multiplier effects of China's government purchase and public investment based on an extended DSGE framework in which monetary policy is characterized by an endogenous money supply mechanism.It shows that both kinds of government expenditures have crowding out effect on private consumption and private investment.Sensitive analysis finds that the main contribution to fiscal crowding out effect is relative lower output elasticity of government capital.In the case of less negative response of money supply to inflation or stronger positive reaction to output in China's monetary policy,the government purchase and public investment will lead to a rise in private consumption and private investment.

Key words: money supply mechnisiam, government purchases, public investment, multiplier effects