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.

Triggering economic growth to ensure financial stability:case study of Northern Cyprus

This study questions the importance of public debt in stable growth between 1980 and 2018,specifically,the Ricardian equivalence hypothesis and Keynesian view are questioned.This study used data obtained from the Northern Cyprus State Planning Office.A restricted vector autoregressive model is used to test the causal relationships between this model and public debt,government expenditure,total capital,consumption,investment,employment,net exports,exchange rate,and gross domestic product growth rate.To ensure financial stability,the variables that trigger economic growth through increased interactions were evaluated.Accordingly,unlike other studies,the Wald test results reveal that public debt does not have a direct effect on the gross national product but indirectly affects total capital,consumption,investment,and public expenditure,all of which influence real gross domestic product(RGDP).It has been observed that employment affects RGDP,consumption,government spending,and investment.There is also bidirectional causality between consumption,government spending,and RGDP.The estimates of the Ricardian equivalent hypothesis are important.However,today’s changing economic policies,declining real incomes,and consumer behavior in the face of ever-increasing inflation require that the theory be redesigned.Therefore,contrary to theoretical predictions,consumers are concerned about maintaining their standard of living rather than directing tax deductions to savings.Contrary to the claims of Keynesian researchers,no causal relationship is observed between public debt and growth in this study.However,public debt directly affects total capital,consumption,government spending,and investment,which are important for sustainable economic policy.

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.

基于地理探测器的我国省级政府卫生支出空间分异成因探究:气候变化驱动的链路机制

目的 从空间分异视角描绘气候变化背景下我国省级政府卫生支出高风险区的特征图谱,对行为、气候、经济、人口、卫生服务与政策等六维脆弱特征进行分异性识别,为后续政策制定提供理论依据。方法 选取中国家庭追踪调查2016年的数据,分别使用分异及因子探测器与交互作用探测器测度多驱动因子独立、耦合交互后对政府卫生支出解释力的变化,利用风险区探测技术对地区主导高危因素进行探索。结果 省家庭年均医疗总费用、省家庭年均住院费用、省平均锻炼时长、省月吸烟率、人均二氧化碳排放量、人均地区生产总值、老年人(65岁及以上)比例的单因子解释力度相对较大,省会城市年极端最高气温、省城市人口占总人口的比例、女性比例、每千人口卫生机构床位数和省总参保率等因素有较强的交互作用。另外,研究识别了18种风险区主导危险因素组合。结论 在气候变化背景下,我国人均政府卫生支出的分布特征是多因素协同作用的结果。在此过程中,气候因素既可以通过层层机制对人均政府卫生支出产生影响,也可以作为催化因素与其他因素耦合,从而进一步加重政府卫生支出的负担。因此,需将气候因素内化、融合于各领域的政策制定中;在国家指导与多部门协同工作机制下,地方政府应建立起符合地区特点及高危因素分布的政府卫生支出政策,综合考虑政府卫生支出的规模与结构。

Simulating the Impact of the Economic Sustainability Plan on the Performance of the Nigerian Economy in the Post COVID-19 Era

This study examines the impact of Economic Sustainability Plan (ESP) on the performance of the Nigerian economy as a national economic resilient policy in the post COVID-19 era within the framework of a macro-econometric model. The study is hinged on the Keynesian general theory of employment, income and interest. Annual time series data spanning from 1970 to 2019 for within sample forecast, and a six-year out-of-sample forecast spanning from 2020 to 2025 were used. The policy scenario of 21.3 percent increase in government expenditure under the ESP as a stimulus package was simulated and the findings showed that increase in government expenditure under the ESP in critical areas would bring about significant impact on the macroeconomic performance of the Nigerian economy, especially on employment, inflation, economic growth and balance of payment in the post COVID-19 era. Emergent from these findings, the study recommended among others that the government should mobilize resources to finance the ESP in order to stimulate the economy in the post COVID-19 era by ensuring prudential fiscal management of resources;and the Central Bank of Nigeria (CBN) should ensure that financial institutions saddled with the responsibility of disbursement of intervention funds reduce interest rate from 9 percent to 5 percent as reflected in the ESP.

PRODUCTIVE GOVERNMENT EXPENDITURE IN A STOCHASTICALLY GROWING OPEN ECONOMY

This paper employs a stochastic endogenous growth model with productive government expenditure in a small open economy to analyze the optimal fiscal policy. First, a stochastic model of a small open economy is constructed. Second, the equilibrium solutions of the representative agent＇s stochastic optimization problem are derived. Third, we obtain the equilibrium solutions of the central planner＇s stochastic optimization problem and the optimal government expenditure policy. Finally, the optimal tax policy is characterized.

Testing the applicability of Wagner’s Law in China based on reconstruction of government expenditure indicators

Wagner’s Law can describe the relationship between government expenditures and economic growth.However,its applicability in China remains controversial.In this paper,we first reconstruct two government expenditure indicators based on the disadvantages of current fiscal expenditure indicators to explain the government scale and then use these indicators to test the applicability of Wagner’s Law in China.Results showed that data from the indicators could support Wagner’s Law well when considering numerical increases in expenditures from 1989 to 2012.However,in terms of relative size of government expenditures proportional increases with the model,the test results of current expenditure indicator do not support the applicability of Wagner’s Law in China.At the same time test results with the two kinds of reconstruction of indicators both can support it well.Overall,the empirical results indicate that new expenditure indicators are more appropriate in testing the applicability of Wagner’s Law in China.

A Study of Chinese Government’s Policies in Industrial Pollution Mitigation

China＇s rapid economic growth poses serious concerns over environmental degradation, especially in the context of higher pollution levels resulting from unprecedented industrial activity. It is commonly held that government policies are effective in the form of investment in pollution control and the imposition of a discharge fee on industrial units for the purpose of safety of environmental quality. In this study, we find that government policies do not prove to be successful in controlling air pollution in comparison to water pollution. Furthermore, air pollution is increasing, while water pollution is following a stable, decreasing curve. Hence, some reforms need to be implemented in government policies, particularly those concerning the effectiveness of investment in environmental protection and improving managerial skills in industry.