The Study Of The Effect Of Aged Tendency Of Population On Fiscal Expenditure And Sustainability Of Fiscal Policy

In the accelerating process of aging of the population, the aging problem gradually become the bottleneck of China's economic development, and various social and economic problems which it caused have attracted more and more people's attention. Whether can handle it well is significant to China's long-term economic development.In Chapter One, first we advanced that aging of population may has bigger effect than Financial Crisis basing the huge budget deficit with the background of the spreading Financial Crisis and the world's economy going down; second we introduce the the old-age insurance system reform of different crowds, and we think that the development of the old-age insurance system has lagged behind the aging expension, and then we point that the problem of trillions of personal space account and the slow old-age insurance reform process of the agencies and institutions et al also affect the sustainability of fiscal policy it caused, and give the significance of the research; at last, we give the structure of the this paper.In Chapter two, we selected two influential models, right away"new classical debt repayment model"and"dynamic route model", and briefly introduce theory of the two models:"new classical debt repayment model"test the sustainability of fiscal policy with the property of the time series of the fiscal expenditure and fiscal revenue sequences, right away testing the cointegration of the fiscal expenditure and fiscal revenue sequences and whether the cointegration vector is [1,-1];"dynamic route model"test the sustainability of fiscal policy by studying the dynamic route of the"national debt/GDP"indicator. Later we estimate the pension expenditure of the retired workers of enterprises, the retired workers of the agencies and institutions and the farmers with marina algorithm in relative models, and then give relative differential expression. But as this paper focused the fiscal subsidy to the pension expenditure, we give the time function expression of the finance pension expenditure based on the relationship with subsidy and the pension expenditure, now we finish the first step. And then we analysised the relationship of the fiscal expenditure, the fiscal revenue and bond balance based on the relative model assumption, and build the model of sustainability of fiscal policy in the condition of aging with the function we just give.In Chapter Three, we first explain the datas, and we measure the sustanability of fiscal policy indicator and the relative warning line. Second we analysis empirically the"new classical debt repayment model","dynamic route model"and the sustainability of fiscal policy model respectively. For the first two model, we use theory respectively to analysis and find that if not consider aging problem China's finance is sustainable in the long-term. For the sustainability of fiscal policy model, as the new farmer pension policy is issued in 2009 and the new farmer pension system plans to cover all the country before 2020, we divide [1998,2020] into two parts in the concrete process. The first part which not considering the new farmer pension policy is [1998,2009], the second part which considers the new farmer pension policy is [2010,2020]. We use Matlab to estimate the model in two parts, and give the results and the figures. And we get the result that if consider the effect of aging, the"national debt/GDP"indicator will exceed the warning line before 2020, the"fiscal deficit/GDP"indicator will exceed the warning line before 2010.The result shows that if consider the aging problem our finance is not sustanable in the long-term, and the aging of population has huge effect to fiscal sustanability viewing from the individual indicator. And later we test the effect of the new farmer pension policy, the result shows that the new farmer pension policy accelerates the effect in [2010,2020],but the effect is very weak, the reason is maybe the small fiscal expenditure which the lower farmer pension standard and the pilot scope is not big. At last this chapter points that some domestic scholars question the indicator which Maastricht Treaty gives, but in the light of our prediction, even if using the indicators the scholars gives, our finance is not sustanable in the long-term, the result doesn't change.In Chapter Four, we select America, Japan and South Korea, and introduce the three countries'aging situation and solutions with their feature respectively. As the aging process and the aging problem of the three countries are different, we give some well targeted advices considering the situation of the three countries respectively.The last part is the conclusion, in this part, first we briefly summarize the effect of aging and new farmer pension policy on fiscal sustainability of our country, and then point the shortage and some areas for improvement of the model.