A Study of Coordinating China's Two-Pillar Regulatory Policy under the Shock of the Fed's Interest Rate Hike-From the Perspective of"Stable Growth"and"Risk Prevention"

Domestic asset price fluctuations triggered by the impact of the Fed's interest rate hike may lead to a spiral of mutual feedback between fluctuations in real economy and systematic risks of the financial sector.By constructing a DSGE model of small-scale open economy including cross-border capital flows and supply-demand financial frictions,this paper describes the negative feedback mechanism formed by the interplay between domestic real-economy fluctuations and financial risks on both supply and demand sides under the impact of Fed's interest rate hike,and studies how to coordinate monetary policy and macroprudential policies under the goals of maintaining stable growth and preventing risks.

Transfer Pricing,Taxing Rights over Cross-Border Sales Income and the OECD Two-Pillar Response

The confluence of several factors including government fiscal pressures and growing opportunities for tax minimization in a digital economy prompted the OECD to embark on a program to reduce base erosion and profit shifting(BEPS).At the same time,countries became increasingly unhappy about international tax rules that left them unable to impose income taxes on companies earning profits by selling to customers inside their country without establishing a taxable presence there.The frustration led to unilateral responses that prompted the OECD to develop proposals to address this problem as well.The OECD’s proposals to reduce profit shifting and enhance taxing rights of sales destination countries evolved into what are now known as Pillar One and Pillar Two international tax reforms.This paper provides an overview of the operation of each of the Pillars and notes the limitations that prevent them from addressing the underlying causes of profit shifting and providing full taxing rights to sales destination jurisdictions.

Navigating the Development of International Tax Regulation in Indonesia

The area of international taxation is constantly evolving due to factors including globalisation,technological advancements,and the economy’s increasing digitalisation.In recent times,there has been an increased focus on addressing tax avoidance,promoting tax justice,and addressing tax issues resulting from the digitalisation of the economy.One of the most significant developments in international taxation in recent years was the BEPS Action Plan and the Two-Pillar Solution framework proposed by the OECD and G20 on BEPS.Indonesia released Government Regulation No.55/2022,which includes regulations on international tax matters,among other things,in response to the globalisation of international taxation.Apart from that,Indonesia is considering applying Amount B as a rule or safe harbour provision because of the dynamics surrounding international tax.Overall,a strong correlation exists between the transformation of international taxation worldwide and the shifts in Indonesia’s international field.

The Effectiveness of Structural Monetary Policy and Macro-Prudential Policies——Based on the DSGE Model That Includes Bank Heterogeneous Credit

Structural monetary policy and macro-prudential policies are important parts of the policy system of the People’s Bank of China.By constructing a dynamic stochastic general equilibrium model that includes the heterogeneity of corporate and bank credit,the authors divide the policies of the People’s Bank of China into seven categories,and explores the policy effectiveness of structural monetary policy,macro-prudential policy and traditional aggregate monetary policy.Through simulation of the model,it is found that whether facing technical shocks,interest rate shocks or credit shocks,the structural two-pillar policy tool that uses the deposit reserve interest rate as the target of operation is most conducive to economic stability.Technological progress has the most positive and lasting impact on output.Interest rates and credit policies will leave follow-up problems in the adjustment of the economy,and structural two-pillar policies can alleviate the impact of these problems.