Risk Evaluation Of The Deficit Fiscal Policy

In order to cope with the mutation from domestic and international economic situation,Chinese government,respectively in1998and2008,regulated and controled macro-economy through the implementation of the deficit fiscal policy,which maked the economy quickly get rid of the risk of recession and into a period of rapid development in China. But at the same time, various public risks,such as soar of the governments debt scale at all levels,slowdown of private investment and consumption growth,frequent occurrence of inflation, Increased employment difficulties, expansion of the residents’income gap, and the resulting increase in efficiency losses, were generated and expanded,which is related to the implementation of the deficit fiscal policy? As is known to all, since the establishment of market economy system,China has promoted the reforms,especially the fiscal decentralization reform,which has established the relationship between central government and local government. However,will these institutional factors lead to the deviation of the deficit fiscal policy in the process of implementing, then generate,even expand public risk? Based on those, this article analyzes the mechanism of the deficit fiscal policy to generate public risk from a system perspective,and assesses possible risks which are generated by the deficit fiscal policy.This paper analyzes the formation mechanism of debt risk, crowding out risk, inflation risk, unemployment risk, income distribution risk, and efficiency loss risk,then assesses these risks. This article is composed by eight chapters. The first chapter is introduction;The second chapter analyzes the mechanism of the deficit fiscal policy to generate public risk from a system perspective;The third chapter,based on the theoretical analysis about convergence of the deficit fiscal policy debt risk,tests its convergence by using Vector autoregressive cointegration model and vector error correction model,and assesses debt risk;The fourth chapter analyzes the mechanism of the deficit fiscal policy to generate crowding out risk,then tests and assesses crowding out risk by using spatial econometric model;The fifth chapter analyzes the mechanism of the deficit fiscal policy to induce inflation risk, and tests and assesses changes in the risk of inflation effect by using Vector autoregressive dynamic model;The sixth chapter analyzes the mechanism of the deficit fiscal policy to generate unemployment risk,then tests and assesses unemployment risk by using state space model;The seventh chapter analyzes the mechanism of the deficit fiscal policy to cause income distribution risk.and estimates Gini coefficient of the urban residents, rural residents and overall residents,then tests and assesses income distribution risk by using HAC-GMM model and SYS-GMM model;The last chapter analyzes the mechanism of the deficit fiscal policy to trigger competitive efficiency loss risk and resource allocation efficiency loss risk,and tests and assesses these risks by using panel data model and stochastic frontier production function model.The empirical results show:(1) Our debt risk exists convergence trend from the long-term, the deficit fiscal policy debt risk is bigger during1998-2004than during2008-2011;(2) Implementation of the deficit fiscal policy has not extrude private investment and,consumption, but increase.Therefore,the deficit fiscal policy did not produce crowding out risk;(3) the deficit fiscal policy inflation risk is bigger during1998-2004than during2008-2011;(4) The total unemployment risk of the deficit fiscal policy is low,while town unemployment risk is lower during1998-2004.But,during2008-2011,the former is continuely rising in fact, moreover,the latter is observably bigger than the former;(5) During1998-2004, The total income distribution risk of the deficit fiscal policy exceed that of urban residents and rural residents,and During2008-2011, the former is slightly lower than the latter;(6)The competitive efficiency loss risk and resource allocation efficiency loss risk,which are caused by the deficit fiscal policy, are big both1998-2003and2008-2011but compared with the first deficit fiscal policy, these are reduced appreciably.