Fiscal Expenditure Structure Research Articles

Aging and the Effectiveness of Fiscal and Monetary Policies

This paper introduces the population structure, the fiscal expenditure structure and the monetary policy into the new Keynesian dynamic stochastic general equilibrium framework, focusing on the analysis of the impact of population aging on China’s macro-economic control policies. The results of the study show that: In addition to the negative impact of the aging population itself on economic growth, the space for maneuvers left for macro-control policies has become increasingly limited, affecting the effectiveness of policy control and increasing the cost of policy implementation. First, with the aging population structure, the positive effects of macroeconomic control policies have been weakened and the negative effects have been strengthened. This shows that population aging has undoubtedly weakened the effectiveness of fiscal and monetary policies. In terms of macroeconomics, the basic effect of population aging is that it will profoundly change the relationship between the national income distribution pattern and the allocation of economic resources. In the long run, population aging reduces labor supply, and the overall economic life cycle gap widens the lack of economic growth and the overall welfare level of society continues to decline. In the short term, accelerating the burden of financial pensions has significantly reduced the space for fiscal policy maneuvers and also weakened the ability of the government to implement anti-cyclical fiscal policies. In terms of policy assessment, the decline in fiscal multipliers has masked the enthusiasm of the financial sector, amplifying its crowding-out effect and impairing the quality of financial performance. In terms of the monetary policy, population aging may bring deflationary pressures, limit the monetary policy’s ability to stimulate aggregate demands, force the Central Bank to adopt more radical measures to achieve the same effect, and be directly exposed to higher macro-economic risk exposures and strengthen financial fragility. Second, in the elderly-dominated society, the central bank’s tolerance for inflation rate has decreased, and interest rate adjustments are more likely to approach the lower limit. Once these new weighing factors are superimposed on the cycle, they will further complicate the operation of the monetary policy. The Central Bank must not only prevent the spread of inflation, protect the economic interests of the elderly, but also prevent the hard landing” economic risks caused by excessive tightening. Objectively, the frequency of policy switching will exceed the previous level, and unconventional monetary policies will probably become the norm. In terms of stabilizing the economy and finance, the lack of effective demand caused by population aging has weakened the effectiveness of traditional monetary policy operations. Severe aging may further trigger liquidity traps and no longer be affected by loose monetary policies. Low interest rates are stimulating investment and consumption. The role is limited. Enterprises no longer pursue profit maximization but minimize debt. As a result, the demand for bank credit is insufficient and the liquidity of the central bank is difficult to release. Under such circumstances, structural reform will become a necessary supplement to the monetary policy. Third, increasing the proportion of working population and maximizing the negative effects of accelerating population aging can greatly improve and increase the effectiveness of fiscal and monetary policies. The loose population policy does not necessarily change the demographic structure and promote economic growth in the short term. The economic problems brought about by population aging are a rather complicated social project. It is not simply a matter of opening up policies and stimulating fertility” that can open the door to alleviate the aging population. Moreover, increasing the labor participation rate will increase the proportion of the working population to a certain extent, effectively increase the supply of labor force, and reduce the tax burden on each of the young people. More importantly, increasing the labor participation rate can effectively increase the labor supply, not only helping to ease the burden of government pensions and guaranteeing the reliability of the pension system in the medium term, but also helping to reduce macroeconomic fluctuations, expand fiscal and monetary policies to create more space for operations, stimulate private consumption and investment, and drive economic growth.

Discussion on the Excessive Growth of Administrative Expenses of Public Expenditure and Countermeasures

With the establishment of socialist market economic system and the transition of government function, it’s necessary to set up public finance suited to market economy, where corresponding fiscal expenditure structure is included, to reflect the demand of market economy for government functions. But as the important part of national public expenditure, its excessive expansion will bring huge financial burden. This paper analyzes the problems and causes of administrative expenses in China and put forward some suggestions.

The Impact of Per-Capita Transfer Payment on the Stabilization of Local Fiscal Expenditure

The transfer payment should exert the economic and social stability effect. However, the empirical data show that the total amount of transfer payment varies greatly in different regions and deviates from the goal of the transfer payment system to a certain degree. If per-capita transfer payment is adopted as the analysis variable, from 1998 to 2015, 31 provincial government financial data were used to empirically test the impact of per-capita transfer payment on the stability of provincial fiscal expenditures. Based on the analysis of the influence of fiscal self-sufficiency and the 5 types of fiscal expenditures closely related to economic and livelihood stability, we can find that the per-capita transfer payment has a significant negative correlation with the stable effect of fiscal expenditure, while the effect of fiscal self-sufficiency on the provincial financial expenditure has no significant effect. Science and Technology Expenditure, Medical Expenditure on the stability of local fiscal expenditure has a more significant negative effect. The influence of Educational Expenses on the stabilizing effect of local fiscal expenditure is not significant. Social Security Expenditure has the same effect as Cultural Expenditure, and has a significant positive impact on the stability of local fiscal expenditure. In order to further enhance the stabilizing effect of transfer payment on local fiscal expenditure, we should improve the current transfer payment system and improve the fiscal expenditure structure of local governments.

Land Market Distortion and Insufficient Household Consumption in China

The insufficiency of residents’ consumption demand is a major challenge now besetting economic growth in China. Different from previous researches which focus on population structure, precautionary savings, liquidity constraints and consumption habits, this paper places emphasis on the effect of land market distortion on insufficient household consumption in China and its function mechanism. Under the background of monopolistic land supply, land market distortion resulting from the local government monopoly of farmland conversion market and primary city land market, is an important reason for weak household consumption demand. Through constructing land market distortion indicators and using the provincial panel data of China from 2000 to 2014, this paper makes an empirical test and finds that land market distortion has a significantly inhibitory impact on household consumption demand, and higher degree of land market distortion leads to lower household consumption rate. These conclusions are still robust after using instrumental variables to alleviate the possible endogenous problem. Further function mechanism research shows that land market distortion affects household consumption primarily through the channels such as rural-urban income disparity, pushing up housing prices, the reduction in labor income share and the aggravation of local fiscal expenditure structure bias. Its policy implication lies in that land market distortion directly inhibits household consumption, and the advancement of the market-oriented reform of land supply is an efficacious method to increase household consumption.

Inter-Provincial Comparative Research on Volk Area Fiscal Expenditure Structure Based on Correspondence Analysis

The author chooses our country volk area fiscal structure as studying object, leading in correspondence analysis method of multi-parameter statistical analysis, choosing year 2013 section data, analyzing inter-provincial Volk Area Fiscal Expenditure Structure by using SPSS18.0, finding that our country Volk Area Fiscal Expenditure Structure has the following feature—clear category, outstanding characteristic, in accordance with the real situation of each volk area, hereby suggesting different volk areas make up shortages by using the others’ advantages, using references within each other, using each other’s experiences.

Effect of Fiscal Expenditure Structure in China on Total Factor Productivity: Empirical Analysis Based on Provincial Panel Data

The paper used the data from 1998 to 2012 of 30 provinces in China to observe the influence of scale and structure of fiscal expenditure in China on total factor productivity through the panel data model. The study shows that the scale of fiscal expenditure has conductive promotion to total factor productivity. The influences are different in diverse years. Finally, the paper studies the endogenous effect of total factor productivity with GMM model.

Measurement and Test of Government Supply Efficiency of Public Cultural Services in China

The scientific evaluation of government expenditure performance of public cultural services is the necessary basis for the formulation of relevant policies of public cultural services and the optimization of the structure of public cultural expenditure. This paper uses the data of 31 provincial governments in China from 2001 to 2013 to conduct an econometric test, investigates the government supply efficiency of public cultural services, and then analyzes the key areas of improving current regional public cultural supply capacity. The results are shown as follows: firstly, the average efficiency losses of the supply of public cultural services at the provincial level is 23%; secondly, according to the efficiency values of the provinces, there are three types of high, medium and low regions, and factors affecting government supply efficiency in different regions are different; lastly, in general, larger government size leads to lower efficiency, higher degree of fiscal decentralization higher efficiency, and higher proportion of cultural expenses lower efficiency, while the effect of the level of economic development on government supply efficiency is very weak. Accordingly, at the same time of promoting public culture services equalization, the regions should reduce government size, optimize fiscal expenditure structure, deepen fiscal and tax reform, improve the government executive power and so on, based on their own circumstances. But more importantly, the public cultural services should be open to the majority of the public, ensuring public cultural rights and needs of the majority.

An Empirical Study of Anhui Province Fiscal Expenditure Structure and Performance

An Empirical Study of Anhui Province Fiscal Expenditure Structure and Performance

Research on the Structure of Public Fiscal Expenditure Based on the Cluster Analysis Methods

The paper extracts the principal component of China’s expenditure per capita of local government based on the factor and cluster analysis method, to determine the structure of fiscal expenditure by category of basic services, senior services, economics, resource protection factor, etc. Then the paper analyzes the regional differences in the distribution of fiscal expenditure structure based on the systematic cluster analysis method. The conclusion is that Beijing, Tianjin and Shanghai are the advanced service category of expenditure growth pole, which drives around cities’ technology as well as education spending, and promotes regional economic growth.