Study Of CGE Model For Fujian Province

In recent years, development of the economy in Fujian province was improved quickly as one of the first opening provinces in eastern China. She has become one of the most developed provinces and her per capita GDP in 2000 ranked the sixth among all the provinces of China. However, the disadvantages of lower GDP and short of successive development are more and more obvious. It is believed that the development foreground of Fujian province will not be satisfactory if nothing is done in policy analysis and economic forecasting. As a means of policy analysis and economic forecasting, the computable general equilibrium model (CGE) has developed for more than 30 years and been proved to be very available and important in these areas. The main advantage of CGE is that it has distinct microstructure in economy and internal relationship between macroscopic and microcomsic variables, and that through it, the argument on selection of different polices is transformed into the difference in parameter hypothesis of behavior model and policy goals involved. What's more, the general equilibrium frame of CGE make it easy to describe the interaction among different kinds of markets or structures and estimate the direct or indirect influence made by the change of certain policy and its effect on the whole economy. In the present study, the necessity and emergency designing CGE model of Fujian province was proposed, and according to the physical truth of statistical data, a social accounting matrix was made, and a balancing and consistent data set completed. On the basis of the above-mentioned work, a six-sector open CGE model for Fujian province, and estimation of the related parameters in this model using calibration and econometrics, were developed. And then, this model was applied to policy analysis (such as finance and revenue) and economic forecasting of Fujian province. It is demonstrated that as for decreasing the difference of the disposable income between people in town and in country and improving the development of economy, increasing the income tax of urban people and at the same time raising the transfer payment of peasants can bring a little better effect than either, and improving the government consumer expenditure and simultaneously increasing the resident transfer payment are better than either, and much better when transfer payment to peasantry is higher than that to urban group. The present paper includes six parts describing the CGE system for Fujian province in details. In the first part, the background and actuality of research in domestic and abroad and the innovation of this paper were introduceded. The second part shows the basic theory of CGE including principle basis, main properties, advantages in application, limitation in using and the new development in the future. In the third part, problems in the process of economic improvement and necessity of designing CGE model of Fujian province were proposed and elaborated. The fourth one mainly introduced all the parameters, variables and equations involved in the six-sector open CGE model presented in this paper, and then a social counting matrix for Fujian province was established and the relative parameters were also estimated in the fifth part. In the end, this model was solved and applied to estimate and select different policies.