Abstract: With the expansion of virtual assets and the continued downturn in the physical manufacturing industry, the phenomenon of “the transfer of capital from the real to the virtual” has become more and more serious, which has led to expectations of “the transfer of capital from the virtual to the real”. By constructing a time-varying parameter econometric model, the paper analyzes the time-varying shock effects of China′s virtual economy and real economy on macroeconomic output, inflation and employment levels in different economic periods of business cycle. It is found that: China′s virtual economy has a positive effect on output during economic prosperity and economic depression, and has a “crowding out effect” during economic stability, and the change of the impact is mainly due to the“deviating” of the virtual economy and the real economy led by expansion of virtual economy ; during the period of economic prosperity, both the virtual economy and the real economy have a positive effect on inflation, during the period of economic depression, the virtual economy can still promote inflation, while the real economy has an inhibitory effect on inflation; during the period of economic stability, both the virtual economy and the real economy have an inhibitory effect on inflation,and the change of the impact is mainly due to changes in market demand and currency liquidity; in different economic periods, both the virtual economy and the real economy have an inhibitory effect on employment, the root cause lies in the transition of the market economy, the transformation of economic growth mode and the imbalance of industrial structure, which will adversely affect employment, and the “crowding out effect” of the virtual economy on the real economy has further suppressed the level of employment. At present, China is in a stable period of economic cycle, the transfer of economy from the real to the virtual would make adversely effects on objective economic indicators, thus leading that it is particularly important to coordinate the relationship between virtual economy and real economy, and some deep-seated factors such as the adjustment of industrial structure and transfer of economic structure should be given more attention when guiding the transfer of economy from the virtual to the real.

Key words: from the real to the virtual, from the virtual to the real, output, inflation, employment