The Dynamic Econometric Studies On Mechanisms And Risks Of Fiscal Policy

As the major form of the macro-economic policy, fiscal policy has alwaysbeen the most important method for the government to adjust and controleconomy, and it's also the main tool to realize demand management. People'scognition of fiscal policy also undergoes dramatic changes, in which differenthistorical stages and different development perspectives are accompanied bydifferent understandings. This essay, based on the theory of macro-economicpolicy, begins with the study of the operating mechanism of fiscal policy, andthen analyzes the different theories and models of fiscal policy at differentperiods of time and stages. After that, an econometric study is made on itspractical effects. The frequent occurrence of the fiscal and financial crises in1980s and 1990s has been attracting more and more concerns over the fiscalrisks, while controlling fiscal risks's influence over economy from theperspective of fiscal policy operating mechanism can make clear how toprevent, warn and manage the fiscal risks. This paper focuses on these two aspects: the operating mechanism offiscal policy and the fiscal riskss. The former combines the study of thetheoretical development, theoretical analysis and practical test with the casestudy. With the development of theory of fiscal policy as its structure, itembodies the ideological trend in the theoretical analysis. Operatingmechanism and its practical effect are inspected in practice and get proved inanalysis. In the theoretical analysis, theories from balance budget and futilegovernment interference of classic economics to Keynesian demandmanagement, from multiple fiscal policy theories of Neo-classic 4comprehensives to the monetary superiority of monetarism and the supplymanagement theory of the Supply School, and till policy neuter of Neo-classicmacro school and Ricardian equivalence, all these have implied that man'sattitudes towards fiscal policy have changed from doubt to blind worship,from concern over its function in increasing economic growth to doubt of itseffectiveness. In the retrospect of the practice of the fiscal policy, emphasis islaid on the practical operation of the fiscal policy in USA and Japan to studyits different operating effects and limitations in different countries, differentperiods and under different development stages. In the model analysis, thispaper selects some representative models, among which are the general modelof IS-LM, Mondell-Fleming model under the open economy, the dynamicmodel of fiscal policy and the rational expectations model, and analyzes theoperating mechanism under different conditions. The case study applies theoryto practice and supplies evidence from its dynamic multiplier effect, economicgrowth promotion effect and Ricardian equivalence.　In analyzing the tools offiscal policy, this paper focuses on the different operating mechanism of eachtool and its effect on economy, and then its conducting method is studied andfurther explores the transformation of active fiscal policy and the consistencebetween tool choosing and policy making. In recent years, China witnesses a fever in the study of fiscal risks, butthe study of the fiscal risks from the functioning mechanism is rarely seen.This paper clearly defines the fiscal risk and further analyzes its classificationand formation from a new respect. This paper from the political andsystematical elements labors the forming mechanism of fiscal risks. Amid thestudy of the function of fiscal policy in crisis, it is found that the directdelomorphic debt risk is the main cause for the crisis described in thefirst-generation crisis model, while the recessive debt risk is the direct causefor the third-generation. This paper divides the expansionary fiscal policy riskinto deficit risk and debt risk, then discusses its resource mechanism, andanalyzes the cost of deficit risk, its influence of inflation and the continuanceof debt risk f...