Research on the Effectiveness of Fiscal Policy and its Exit Strategy

Author: Guo Qingwang
Publisher:
Publish Date: 2007-01-01
Features: This book focuses on active fiscal policy, emphasizing two key issues: the effectiveness of active fiscal policy and the exit strategy for active fiscal policy. Regarding the evaluation of the effectiveness of active fiscal policy, it first examines whether the Ricardian equivalence theorem holds in China and the crowding-out effect of fiscal deficits to explore the demand effects of active fiscal policy. Then, it investigates the supply effects of active fiscal policy by examining its spillover effects, the growth effect on capital productivity, and the growth effect on total factor productivity. Finally, it analyzes the economic growth effects of active fiscal policy from three different perspectives: the overall perspective, the regional perspective, and the fiscal investment perspective. Regarding the analysis of the exit strategy for active fiscal policy, it first explores the conditions and timing for phasing out active fiscal policy through comparative analysis of actual output and potential output, trend analysis of inflation rates, and analysis of economic cycle turning points. Then, from the perspective of fiscal policy itself, it studies the exit strategy for active fiscal policy (sound fiscal policy), primarily focusing on whether to increase fiscal revenue or reduce fiscal expenditure to lower fiscal deficits and ensure the smooth phasing out of active fiscal policy (effective implementation of sound fiscal policy) and its sustainability.