A Research On Fiscal Policy Transformation Based On Structural Reform Of The Supply Front

Since 1997,in order to deal with economic fluctuation,China's government has been implementing contra-cyclical fiscal policy.It brings some problems while it helps the whole economy weather crises.In order to test effect of fiscal policy,this dissertation reviews the practices of contra-cyclical fiscal policies based on the literature review,and sets up an econometric model of Chinese IS-LM model,calculating the multiplier effects of fiscal policy variables.The results shows that among several fiscal policy variables,government expenditure multiplier effects is the greatest one,reaching over 1.5,which is greater than transfer payment multiplier and tax multiplier.Meanwhile,government expenditure multiplier is decreased with the fiscal policy implemented,indicating that the effect of traditional contra-cyclical fiscal policy is weakened.In addition,after 2008,government carries out proactive fiscal policy.This fiscal policy not only stimulates the economy,but results in a mismatch between supply and demand,namely structural imbalance.Based on the economy and practice of contra-cyclical fiscal policies implemented since 1997,this dissertation analyzes logic of the Structural Reform of the Supply Front,and draws a conclusion that aim of the reform is soaking excessive production capacity,as well as fostering new power of economic growth.In order to boost the Structural Reform of the Supply Front,this dissertation points out the general idea and specific content of fiscal policy transformation.As the general idea of fiscal policy transformation,government should regulate the economy from structure perspective instead of amount perspective,and from a long-term perspective instead of a short-term one.The specific content contains reducing corporate tax and expense burden,standardizing the corporate-related administrative fees,increasing the fiscal support for absorbing surplus capacity,building tax linkage mechanism,and increasing fiscal support for innovation,etc..In order to complete the fiscal policy,this dissertation also put forward institutional guarantees.