Expansive Fiscal Policies and Supply-Demand Imbalance： A Chicken and Egg Problem？

It is generally accepted that governments favor expansive fiscal policies to address an economic scenario in which supply exceeds demand. In other words, economic imbalance is regarded as the cause of the problem and fiscal expansion as the result. However, this paper posits that China＇s expansive fiscal policies may also be a major cause of its economic imbalance, and that fiscal expansion and economic imbalance create cumulative causation. Specifically, China＇s tax system, characterized by a regressive commodity tax, intensifies constraints on domestic consumption while distributing a large proportion of national income to government and enterprises; supply-demand imbalance prompts the government to expand fiscal expenditures and increase taxes, which further exacerbates this imbalance. Thus, even as the country faces a macroeconomic imbalance, the strong measures it adopts in response may stimulate economic growth in the short term, but in the long term, they may do exactly the opposite and create the next economic crisis.

China’s Proactive Fiscal Policy

In contrast to the traditional Western approach to macro-fiscal management,China’s proactive fiscal policy is founded on a people-centered development philosophy and,with distinctive Chinese characteristics,is a significant policy innovation of macroeconomic management in the Chinese modernization.Although there are notable distinctions between the Western“Keynesian”and the“nonKeynesian”schools of thought,both of these approaches’core policy goals and methodological roots are the same,composing the traditional Western macro-fiscal approach.This approach faces increasing real dilemmas.China’s proactive fiscal policy,however,places greater emphasis on future potential growth rates in addition to equilibrium between supply and demand,achieving a fiscal policy transformation with a new approach.In this paper we argue that with such a new approach,China should reconsider the nature and reasonable level of the fiscal deficit,the function and risk assessment criteria of government debt,the scope and effects of reductions in taxes and fees,its approach and focus of demand management,and the costs and resulting efficiencies of policies in order to develop a new fiscal policy paradigm that is more in line with its stated goals.

Does Financial Globalization Discipline Macroeconomic Policies

Using the unbalanced panel data of 160 countries from 1970 to 2007,we employ inflation and the budget deficit as proxies for monetary policy and fiscal policy,respectively,and study whether financial globalization has discipline effects on these macroeconomic policies.The empirical results in our study suggest a significant discipline effect of financial globalization on monetary policy during the entire sample period,which is robust both to de jure and to de facto measures of financial openness.Our sub-sample investigations demonstrate that financial globalization reduces inflation only in higher-middle-income and high-income countries,and when financial globalization is scaled by the proportion of a country’s foreign assets and liabilities to its GDP,the discipline is evident only after 1988.Nevertheless,we do not demonstrate any evidence of financial globalization’s discipline effect on fiscal policy.The empirical results indicate that financial globalization even increases the budget deficit in certain countries and periods.

Mixed Monetary-Fiscal Policies and Macroeconomic Fluctuations:An Analysis Based on the Dynamic Stochastic General Equilibrium Model

The existing literature on macroeconomic policy research is mainly concerned with the impact of a single monetary or fiscal policy on China 5 macroeconomic fluctuations in a closed economy.However,the effect of a mix of monetary and fiscal policies has been neglected.This paper addresses this issue with an open economy dynamic stochastic general equilibrium model.It applies impulse-response and welfare analyses to explore the stabilization effect of various mixes of monetary and fiscal policies.The results show that the optimal monetary policy and fiscal policy mix varies in different cases.When government spending shocks happen,the aggressive fiscal policy and passive monetary policy would be the best choice.In contrast,for domestic interest rate shocks,foreign interest rate shocks,and foreign consumption shocks,the passive fiscal policy and aggressive monetary policy are more applicable.This article explains China's economic fluctuations and highlights the importance of mix of monetary and fiscal policies in the face of different shocks.

Study on Medium-and Long-Term Fiscal Policies to Cope with Climate Change under the"Dual Carbon"Goals

Carbon peaking and carbon neutrality constitute an extensive,profound and systemic economic and social change.It is worthwhile to explore how fiscal policy,as a key institutional arrangement in the public policy system to cope with climate change,can play a fundamental and pillar role.Based on literatures,theories and empirical materials,this paper systematically explores the relationship between climate change and public finance.The fiscal impact of climate change will eventually be reflected in fiscal behavior,fiscal costs and fiscal relations,and the fiscal system has the adaptability of an"automatic stabilizer"and the proactiveness to enable the Discretionary Approaches function when facing climate change impacts.This implies such a governance logic of fiscal policy that is systematic,forward-looking and flexible in addressing climate change.In the future,it is necessary to further incorporate climate change or related environmental factors into the fiscal policy framework,target the two key aspects of mitigation and adaptation,and carry out a holistic,systematic and forward-looking reform of the existing fiscal expenditure policy,fiscal revenue policy,fiscal investment and financing policy,government budget system,government procurement policy and ecological compensation policy.While highlighting the"governance"function of fiscal policy in addressing climate change,Chinese government needs to strengthen the coordination and collaboration between fiscal policy tools and other public policies,and magnify the governance effectiveness of fiscal policy in the process of addressing climate change.This paper helps understand the positioning,role and influence of fiscal policy in the process of addressing climate change,provides a basis for better playing the fundamental and underpinning role of the modern fiscal system in the governance of ecological civilization,and presents an analytical framework for building a theoretical system of ecological fiscal governance.

A study on fiscal and taxation policies for ecological compensation

It is pointed out that it is necessary to speed up the reform of ecological civilization system, promote green development and build a strategic plan for China. Ecological compensation is a management measure that regulates the balanced development of economy and ecological environment, and fiscal policy is an important means in ecological compensation. Based on the fiscal and taxation policies of ecological compensation, this paper draws on the current situation and existing problems of current ecological compensation machine in China from three aspects: fiscal expenditure, tax policy and charging policy, based on various theories of ecological compensation taxation policy at home and abroad. In the end, it makes relevant policy recommendations.

Promoting or inhibiting? Green fiscal policy and urban green innovation

Can green fiscal policy(GFP)incentivize the proliferation of urban green innovation(GI)and be a novel cata‐lyst for energy conservation and emission reduction within the“dual-carbon”framework?This paper explores GFP ramifications for GI by implementing a difference-in-differences model in a natural experiment centered on the“Comprehensive Demonstration City of Energy Saving and Emission Reduction Fiscal Policies”.The em‐pirical analysis reveals several key findings:(1)GFP exhibits significant augmentation at the GI level,with an observable evolutionary trend of increasing marginal impact.Importantly,these outcomes withstand rigorous robustness tests,including propensity score matching.(2)A mechanism analysis elucidates the dual impact of GFP on GI growth.GFP directly fosters GI advancement indirectly by promoting talent aggregation,expanding scientific and technological investment,and attracting external financial resources.(3)A heterogeneity analy‐sis demonstrates that GFP enhancement of GI is closely associated with the patent category,manifesting a dis‐tinct pattern of“eastern region>other regions”and“non-resource cities>resource cities”.The study’s em‐pirical findings offer crucial real-world insights to guide the Chinese government in formulating a more effi‐cient GFP and facilitating the expansion of innovative endeavors while contributing to environmentally sus‐tainable and high-value development.

Fiscal Policy and Inflation in Nigeria

This paper empirically examined the impact of fiscal policy on inflation in Nigeria.Time series data on inflation,government revenue,government expenditure,and gross domestic product were sourced from the Central Bank of Nigeria(CBN).The aforementioned secondary data cover the period from 1981 to 2021.The Augmented Dickey Fuller(ADF)unit root test and Johansen co-integration test were used to testing for data stationarity and the existence or otherwise of co-integrating equations respectively.Thereafter,data were analyzed using Ordinary Least Square and Parsimonious Error Correction techniques.Findings from the study show that government expenditure and revenue both have a positive relationship with the rate of inflation,though the latter is not statistically significant.Also,there is a positive but insignificant relationship between inflation and gross domestic product.In line with the above findings,we,therefore,recommend that the Nigerian government at all levels(local,state,and federal)should be tactful in the use of fiscal policy tools to avoid triggering inflationary pressure and its negative multiplier effects on the welfare of its citizenry.

RECURSIVE UTILITY,PRODUCTIVE GOVERNMENT EXPENDITURE AND OPTIMAL FISCAL POLICY

This paper employs a stochastic endogenous growth model extended to the case of a recursive utility function which can disentangle intertemporal substitution from risk aversion to analyze productive government expenditure and optimal fiscal policy, particularly stresses the importance of factor income. First, the explicit solutions of the central planner＇s stochastic optimization problem are derived, the growth maximizing and welfare-maximizing government expenditure policies are obtained and their standing in conflict or coincidence depends upon intertemporal substitution. Second, the explicit solutions of the representative individual＇s stochastic optimization problem which permits to tax on capital income and labor income separately are derived ,and it is found that the effect of risk on growth crucially depends on the degree of risk aversion,the intertemporal elasticity of substitution and the capital income share. Finally, a flexible optimal tax policy which can be internally adjusted to a certain extent is derived, and it is found that the distribution of factor income plays an important role in designing the optimal tax policy.

Fiscal Policy Effect Analysis Based on Agents Response Equilibrium (ARE) Model

Agents response equilibrium (ARE) model has been taken advantage of to build a multi-agent system for analyzing fiscal policy effect. Through establishing various types of economic entities and endowing them with abilities to react and make decision, the whole system will evolve to new conditions in response to policy change. Compared with different scenarios, it can be concluded that when raising taxation ratio, sectoral scale will shrink to some extent. But supported by government expenditure, certain sectors could be kept in comparatively larger production scale.

The Impact of Tax Policies on Taxpayers Budget in Terms of Risk, Sensitivity and Volatility

Local and central governments are concerned to develop fiscal policies that are based on principles already enshrined in the literature as the principle of equity and/or the principle of fiscal appropriateness. Beyond these principles, the governments want to make sure that all taxpayers have the capacity to pay at maturity the tax debts owed to the public budget. In crisis situations, as recent experience has shown, governments adopt fiscal policy measures, with the sole purpose of procuring financial resources to cover the huge government budget deficits. In this situation, a natural question arises： Do governments need, for the elaboration of their fiscal policy, an analysis that takes into account the taxpayer＇s budget？ Or is it sufficient that they confine only to the theoretical principles enshrined in the literature or the tax paying ability of the taxpayers？ The answer can only be affirmative, because any taxpayer＇s budget is an inexhaustible source of resources for the public budgets. It is undisputed that in the taxpayer＇s budget, the tax expenditures coexist with other categories of expenditures such as consumption expenditures, durable expenditures and public utilities expenditures. Each expenditure type is risk-bearing. To study the structure of budget expenditures within the taxpayer, the authors suggest the use of three indicators innovative for the science of public finance： the risk, the sensitivity coefficient and the coefficient of volatility. Depending on the values registered by the three indicators of fiscal policies, expenditures can be classified as risky, volatile and sensitive which may lead to risks of failure to collect the taxes and/or to tax evasion. Innovative for the science of public finances is that the fundamentation of the fiscal policies is realized using the three indicators, the budget of the taxpayer and the networking between the categories of expenditures that fall within its budget structure

China’s Institutional Strength,Monetary Policy Coordination and Fiscal Crowding-in Effect

As two main tools of macroeconomic policies,coordination and conflict between fiscal and monetary policies have been paid considerable attention by researchers.Under a structural vector autoregressive model that incorporates fiscal and monetary policies,this paper analyzes the monetary policy response to fiscal shocks.Our study finds that during the occurrence of a fiscal shock,the growth rate of broad money supply M2 substantially increased,indicating the adoption of an expansionary monetary policy by the monetary authority to fiscal policy expansion.Based on this empirical finding,this paper improves the dynamic stochastic general equilibrium model to investigate the fiscal policy effects under China’s monetary policy coordination.Our analysis shows that monetary policy coordination will significantly boost the economic stimulus effect of fiscal policy,generating a fiscal crowding-in effect.From the perspective of China’s institutional strength,this conclusion offers a theoretical explanation on the empirical fact of the fiscal crowdingin effect uncovered in the research literature,and offers a policy reference for making the proactive fiscal policy more efficient and effective.This paper suggests that China’s policymakers give full play to the country’s institutional strength by coordinating fiscal and monetary policies for high-quality economic development.

Impact of Fiscal Policy on Economy After Accession to the Euro Area： The Case of Poland

The impact of Polish fiscal policy on economy after accession to the euro area is analyzed in the article. It was found that government spending financed by distortionary taxation affects output in a different way than in case of government spending financed by bonds. Poland＇s accession to the Economic and Monetary Union will reduce the possibility of increased government spending financed by bonds, which in light of the presented model will greatly reduce the possibility of stimulating the economy through fiscal policy.

How China＇s Fiscal Policy Contributes to Investment and Economic Growth： Experience and Lessons

This paper （1） discusses how the two indicators used in official statistics of China, namely total investment in fixed assets and the gross fixed capital formation, reflect changes infixed asset investment and their relationship, （2） analyzes the growth of fixed asset investment and its contribution to changes of economic growth rate since the reform and opening-up, and （3） explains how fiscal policy impacts the growth of fixed asset investment and analyzes in detail the impacts of the two rounds of contractionary fiscal policy, two rounds of expansionary fiscal policy and one round of neutral fiscal policy on China＇ s fixed asset investment growth since reform and opening-up using full and accurate data. Practice shows that the impact of fiscal policy on China＇ s fixed asset investment is direct and obvious, yet sometimes too drastic. In the future, fiscal policy should be used in alignment with other economic policies with appropriate intensity and timing so that it will help stabilize the growth of fixed asset investment.

Decision-making Principles and Evaluation Frame of Harmonious Fiscal Policy

Harmonious fiscal policy is the Inner requirement for Constructing Harmonious society and is an important means of realiziug such society. The harmonious fiscal policy should realize the harmony of “two hands”, the harmony of values, the unity of short-term and long-term harmony the unity of parts and the whole harmony, the unity of internal and external efficacy harmony. To scientifically evaluate harmony of fiscal policy is the prerequisite to bring harmonious fiscal policy to its full play.

China to Continue Proactive Fiscal Policy

China will continue to implement its proactive fiscal policy in 2011 and better handle the relations between maintaining steady and relatively fast economic development, restructuring the

Fiscal and Tax Policy Research on Promoting Energy Transition in China under the"Dual Carbon"Goal

The"Dual Carbon"Goal is one of the critical strategic tasks in China's new stage of development,and fiscal and tax policies play an essential role in promoting the"dual carbon target"process.Currently,China's fiscal and taxation policies to encourage the realization of the"dual carbon"target are faced with problems such as the lack of budgetary and tax regulation means and the lack of investment in the energy conservation industry.Throughout the mature experience of Britain,the United States,Japan,and other countries,although different,they all chose to levy carbon tax and tax incentives as the path to promote energy transformation.To further encourage energy conversion,China can choose to establish a carbon tax mechanism and promote and improve low-carbon preferential policies and other diversified fiscal and tax policies.

Rethinking the Rise of Global Central Bank Digital Currencies:A Policy Perspective

This article discusses the impact of central bank digital currency(CBDC)from the perspective of monetary and fiscal policy.We mainly discuss how retail CBDC can improve traditional policy performance.We argue that A CBDC helps existing monetary policies to break through the zero lower bound,shorten the policy time lag,realize selective policy interventions,and make possible the price level target policy system.Similarly,the combination of CBDC and smart contracts can directly affect the performance of the fiscal policy.Compared with the convenience and impact of CDBC as a medium of exchange,its impact as a policy tool is more profound.The current monetary policy is facing a zero lower bound.The fiscal policy is facing a huge sovereign debt crisis and the impact of other private digital currencies on fiat money,which makes the importance of CBDC as a new policy tool more prominent.However,the research on CBDC as a policy tool has many fundamental questions that remain to be answered.This paper contextualizes CBDC with global challenges in policies and new technology advances,and the authors rethink CBDC from a policy perspective,which may provide many new thoughts and have implications for the rise of global CBDC.

Status, trends and enlightenment of global oil and gas development in 2021

By analyzing the distribution of global oil and gas fields and the reasons why some oil and gas fields are not in production, the distribution characteristics of oil and gas remaining recoverable reserves and their year-on-year changes, the distribution characteristics of oil and gas production and their year-on-year changes, and the development potential of oil and gas to be tapped in 2021, this paper sorts out systematically the current status and characteristics of global oil and gas development, summaries the major trends of global oil and gas development, puts forward enlightenment for international oil and gas cooperation. In 2021, oil and gas fields were widely distributed, the number of non-producing oil and gas fields was large;the whole oil and gas remaining recoverable reserves declined slightly, unconventional oil and gas remaining recoverable reserves dropped significantly;the overall oil and gas production continuously increased, the outputs of key resource-host countries kept year-on-year growth;undeveloped oilfields had abundant reserves and great development potential. Combined with global oil and gas geopolitics, oil and gas industry development trends, oil and gas investment intensity, and the tracking and judgment of hotspot fields, the major trends of global oil and gas development in 2021 are summarized. On this basis, the four aspects of enlightenment and suggestions for international oil and gas cooperation and development strategies are put forward: attach great importance to the obligation of marine abandonment to ensure high-quality and long-term benefit development of offshore oil and gas;adhere to the principle of not going to dangerous and chaotic places, strengthen the concentration of oil and gas assets, and establish multi stable supply bases;based on the multi-scenario demand of natural gas, realize the transformation from integrated collaboration to full oil and gas industry chain development;increase the acquisition of high-quality large-scale assets, and pay attention to the continuous optimization of the shareholding ratio of projects at different stages.

Total Spending Equation of St. Louis Model： A Causality Analysis for Turkish Economy

Andersen and Jordan （1968） aimed to measure efficiency of monetary and fiscal actions on real GDP by employing a time-series model which was called as St. Louis Model afterwards. Although the model is performed in many countries similarly, the results differ from each other in accordance with the economic structure of relevant country In this regard, the aim of this paper is to investigate the effectiveness of monetary and fiscal policies on real activity and to find out causal relationship among questioned variables using OLS and causality methodologies in Turkish economy over the period 1998：1-2010： IV. Empirical findings indicate that only monetary policy has a significant positive effect on economic activity in the short run, Nonetheless, neither monetary nor fiscal policy has significant impact on real output in the long run. Causality analysis shows that there exists a unidirectional causality running from real output and money stock to government expenditures. Moreover, not surprisingly, it is also found that crisis experiences of Turkey in sample period have highly adverse impact on real activity. Causality analysis suggests us considering government expenditures as explained variable instead of real output. Hence, it can be concluded that St. Louis Model total spending equation is not applicable for Turkish economy during 1998-2010 periods