Study On The Stimulation Test Of Fiscal Policy Effects Of China

The current economic structure of our country is facing a serious pressure of imbalance. Many problems can not be solved by monetary policy, and fiscal policy is in need (Stiglitz 20141), and which is the major background of that China takes the financial system reform as a top priority of the comprehensive reform intensification. In fact, the financial system reform for the target of adjusting the imbalanced structure and any other relevant policy are adjustment and reconfiguration of resources and profits, which is bound to affect the whole system with one movement, and necessarily impossible to give consideration to gain and loss. Therefore, for the sake of economic stability and effects of social policies, the introduction of policies needs to be proofed by rigorous theory, and make trial experiments, and had better simulate to fully implement the policy to test its effect. However, the society can not bear the huge cost of risk of the policy experiments, nowadays, simulating policy implementation by computer to testing the effects, adjusting and perfecting the experiments after discovered any problems has become an important method to reduce policy fault and improve its effects.At present, the general policy simulation experiments are conducted by dynamic stochastic general equilibrium (DSGE). DSGE. It tested the effects of the policy from the impact response message of system variables on various factors by the structure of the model, which provides a viable experimental tool for evaluating the policy effects in advance.Referred to the overseas classic DSGE model, this paper based on the national conditions introduced the fiscal policy rules, completed DSGE model used in the simulation test of the fiscal policy effects in China, and try to evaluate the relevant fiscal policy effects in China. The research is advancing by addressing the following questions:the basis of the theoretical method for fiscal policy mechanism and policy effects measurement, the simulation target of the establishment of the model and the system structure and composition, as well as how to choose a foreign classic model to conduct localization reform, how to ensure the simulation and soundness of the established model on the macroeconomic simulation on the economy of China, how to test the economic effects and policy effects of the fiscal policy of China, what are the evaluation findings and policy space can we get, and so on.This paper includes 7 chapters. The first chapter introduced the background and significance of this paper. The second chapter is the literature review, including settlement of the historical logic of the theoretical debate on the effects of fiscal policy, the proposal of DSGE model and development, as well as the settlement of the documents on evaluating the effects of fiscal policy by empirical data.The third and fourth chapter established the DSGE model of Fiscal Policy in China, simulated to test the effects of fiscal policy, and provided researches that conducted on the economic theory foundation and methodological basis. This is the weakness of the relevant researches on the DSGE model of financial issues in China.The fifth chapter is about the research on DSGE model that established for simulating to test the effects of fiscal policy in China. This chapter completed the referring to the CEE-SW of New Keynesianism and conducted localization reform. Based on fiscal balance rule, introduced the reaction mechanism of expenditure and revenue on government debt and outputs into the system, providing conditions and linear processing for realizing balance of the economic system in China.The sixth chapter is the research on the simulation test of the effects of the fiscal policy in China, includes evaluating the parameters of the model based on the realistic data, and establishing the macroeconomic data simulation system. Based on response of economic variable and policy variable on various impacts, this paper simulated to test the economic effects and policy effects of the fiscal policy, and evaluated the relevant policy effects through theoretical variance decomposition and historical impact decomposition technique.The seventh chapter is about the conclusion and the prospect of the research.This paper includes four innovation points:Firstly, proposed the economic theory foundation and methodological basis for the research on the DSGE model of fiscal policy effects, which is the weakness of the research on fiscal issues by means of DSGE model.Secondly, based on the actual situation of China, "localized" the classic foreign DSGE model and introduced relatively complete fiscal policy rules, and completed the establishment of the DSGE theoretical model that used for researching fiscal issues in China.Thirdly, through the estimation effective tax rate of labor, capital and consumption, as well as the parameter bayes estimation technology, this paper completed the establishment of the DSGE empirical research model that used for researching fiscal issues in China. In addition, innovated in two aspects in the research on simulation experiment of policy effects:first, inspected the response of major macroeconomic variable on various impacts, and inspected the response of policy variable on various impacts through proposed policy effects and policy interaction effects, second, conducted theoretical variance decomposition and historical impact decomposition on the impact response on various variables.Fourthly, proposed significant system evaluation and corresponding policy space based on the checking information of policy effects.