Empirical Study On The Regional Effectiveness Of Our Fiscal Policy And Its Reason

The fiscal policy is an important measure for moderating economic fluctuation, and an effectual economic policy to promote the harmonious growth of the regional economy. So the existence of regional effectiveness of fiscal policy, which is not only affect the goals of government macro-economy, but also enlarge the regional economic disparities. We detailedly investigate the regional effectiveness of our fiscal policy and its reasons over the 1979-2007 periods using the method of modern econometrics of a structural VAR model, impulse response function, variance decomposition and vector error correction model etc, and also suggest more appropriate measures.This dissertation's primary conclusion is listed as follows:1,Under simplest thought, the effectiveness of fiscal policy has a countrywide homology. But in fact, the phenomenon of regional effectiveness of fiscal policy always occurs because of the differently regional environment and the complex transmission mechanism. Because of that, the goals of fiscal policy are came true difficultly, and the disparity of regional economy development is also enlarged.2,As for the effectiveness of fiscal policy and its transmission mechanism, there is no consensus in macroeconomics theory. Through an empirical research of the practice of our fiscal policy, we find that the increase of fiscal expenditure will increase the output, private consumption and investment, to boost taxation policy will reduce the output, private consumption and investment.3,The study of regional effectiveness of fiscal policy was limited by a lack of the basic theory like as'the theory of optimum currency areas'at present. We comprehensively investigate the regional effectiveness of our fiscal policy using modern econometrics methods, the results indicated that there is a remarkably regional effectiveness of fiscal policy with the largest on the coastal followed by the central and western.4,By empirical research, We found five reasons for the regional effectiveness of our fiscal policy, including disparity of the regional economy, difference of regional industrial structure and differential effectiveness of fiscal instrument, structure of government expenditure, channels of fiscal policy transmission, local government.5,Analyzed the above five reasons, we suggest some more appropriate and operable policy measures. Such as promoting the harmonious growth of the regional economy, optimization and upgrading of the industrial structure, changing fiscal expenditure and tax preference, optimizing the structure of fiscal expenditure, and improving the investment environment of central and western etc.