Research On The Appropriate Scale Of Japanese Local Government Debt Based On Economic Growth

To break the capital constraints and inject vitality into economic growth,local governments can not do without the means of government debt.However,local government debt has potential risks,which may in turn restrict economic growth.Therefore,whether at home or abroad,the impact of local government debt on social and economic development,gains and losses,has always been a hot issue of academic concern.China's local government debt is huge in scale and has complicated causes.Its essence is a kind of institutional phenomenon.It not only highlights the key role of local government in economic development,but also reflects the fact that the administrative power and financial power between central and local governments do not match.At the beginning of reform and opening up,borrowing is an important means to make up for China's fiscal deficit;after the outbreak of the Asian financial crisis and the global financial crisis,borrowing has become an inevitable choice to stimulate economic growth.Especially in recent years,whether in the economic expansion cycle or the contraction cycle,local governments have the impulse to expand investment financial expenditure and debt financing,showing obvious pro cyclical characteristics,which undoubtedly highlights the urgency of preventing financial risks and solving local government debt problems.For Japan,local debt is an important supplement for local governments to raise funds after the war,which has played a good role in promoting the development of local economy.Since the implementation of financial liberalization reform in Japan,with the improvement of fiscal decentralization,some of the affairs originally undertaken by the state need to be undertaken by local autonomous bodies,which brings huge financing pressure to local governments.Faced with the pressure of economic depression and the expansion of the gap between fiscal revenue and expenditure growth,the Japanese local government has taken the issuance of local debt as an important means to cooperate with the central government's expansionary fiscal policy,which makes the scale of local debt continue to rise.At the end of 2018,Japan's GDP was about 4.97 trillion US dollars,but the national debt was as high as 1100 trillion yen(nearly 10 trillion US dollars),with a debt ratio of 200%.Compared with Japan's high national debt,Japan has implemented scientific scale control standards for local government debt,and continuously strengthened the issuance management,operation management and risk control of local government debt.Since 2000,the balance of local government debt in Japan has been maintained at about 200 trillion yen,and the annual issuance of local government bonds has basically remained stable,and local government debt has been initially obtained Therefore,it can avoid transferring the risk of excessive debt scale to economic growth.Under the influence of the epidemic,China is currently facing two major pressures: one is the decline of economic growth;the other is that the issuance of local debt increases the pressure on local governments to repay debts.Therefore,in order to prevent and resolve the financial risks,it is necessary to study and judge the situation of China's local debt and draw lessons from the experience of other countries,so as to avoid the local debt problem from evolving into a "grey rhinoceros" that affects economic growth.This paper mainly focuses on the following aspects:(1)on the basis of clarifying the relevant concepts,starting from the general theory of local government debt,and from the perspective of economic growth,reviews the reasons for local government debt,moderate scale and debt management theory.With the help of the expanded IS-LM model,Barro model and new economic growth theory,this paper clarifies the short-term and long-term mechanism of local government debt acting on economic growth,laying a solid theoretical foundation for the calculation of the appropriate debt scale;(2)investigating the development process of Japanese local government debt.Starting from the relationship between central finance and local finance in postwar Japan,this paper reveals the dynamic change characteristics of Japanese local government debt from the perspective of economic growth in the long-term game of central and local financial power,and excavates the regularity between local debt issuance and economic growth stages,so as to provide an important practical basis for empirical analysis;(3)on the basis of theoretical analysis and practical investigation,this paper explores the dynamic characteristics of local government debt under the perspective of economic growth This paper makes an empirical analysis on the moderate scale of Japanese local government debt.First of all,combined with the distribution characteristics of Japanese local government debt,the relationship between Japanese local debt and regional economic growth is statistically analyzed;secondly,using VAR model and impulse response function,the short-term market economic development effect of Japanese local government debt is empirically tested;thirdly,based on Barro model,a quadratic model is established from the long-term dimension.The gradient descent method of iterative method is used to fit the data of the relationship between Japanese local government debt and regional economic growth to realize multiple function regression.At the same time,the nonlinear relationship between Japanese local government debt and economic growth is tested by using the system generalized moment estimation principle.Finally,through the dynamic panel threshold method,the "threshold" of Japanese local government debt is analyzed(4)to analyze the control measures of Japanese local government debt scale.Its experience and lessons in the issuance,operation and risk management will provide important reference and Enlightenment for China to grasp the debt management and stable growth;(5)combining with the actual problems of local government debt in China,actively explore the direction of financial system reform,especially from the aspects of dealing with the debt scale and debt maturity,debt scale and regional differences,etc.,for China's local debt moderate regulation Finally,it puts forward specific countermeasures and suggestions to control and prevent the local debt risk.In the process of research,this paper puts forward and demonstrates the following propositions:(1)whether Japanese local government debt promotes or restrains economic growth;(2)whether the relationship between Japanese local government debt and economic growth is "inverted U-shaped".The results show that: first,the explosive growth of Japanese local debt is closely related to the response to financial crisis and the growth of service economy.Japan intervened in the national economy by using local debt and fiscal leverage to invest in public utilities,creating market demand,which became an important reason for the rapid development of Japan's economy after the World War II.Secondly,this paper collects and collates the panel data of 34 prefectures and counties in Japan from 2009 to 2015 after the international financial crisis,and the results show that Japan's local government debt and local economic growth The optimal solution of debt ratio fitted by Python software is between 20% and 25% under gradient descent method,and the debt threshold measured by threshold model is 23.7%,which indicates that moderate local government debt scale has a positive effect on economic growth,otherwise,it will damage steady economic growth.In addition,material capital and human capital investment,especially college education,are also affected At present,Japan's local economic growth is still an important factor.In the age of Japan's aging children,government consumption is still an important role in boosting the economy,but the pulling effect of foreign trade on the economy is gradually weakening.Tokyo circle,Kansai circle and Nagoya circle are less dependent on debt,and the areas outside the three metropolitan areas are more affected by the expansion of debt scale,showing the characteristics of debt driven economic growth.Thirdly,the issuance scale and use of Japanese local government debt are more reasonable,which can promote economic growth to a certain extent,which is closely related to Japan's effective debt scale management measures.The main innovation of this paper is reflected in the following three aspects: it enriches the theoretical research on Japanese local government debt.By analyzing the long-term game between the central government and the local government,this paper reveals the dynamic characteristics and regularity of local government debt financing in economic growth,reflecting the close correlation between the two;second,it integrates a variety of empirical analysis methods.Using the principle of gradient descent method and the visual advantage of Python software,this paper simulates the long-term effect of Japan's local government debt on economic growth;then uses the system generalized moment estimation method for quantitative test,which strengthens the persuasion of Japanese local government debt scale management and control experience;thirdly,it supplements the relationship between Japanese local debt and economic growth in empirical field The conclusion is "inverted U-shaped",and the threshold model is applied to explore its appropriate scale.