| Our domestic economic situation continues slowdown since entering the "new normal",with the structural contradiction of the economy increasingly outstanding.The government timely launches of the "Supply Side structural reforms".In this case,the amount and structure of the local finance will be influenced by a certain,and the sustainability of local government debt will also suffer.The paper expounds the connotation of local government debt sustainability in details on the basis of literature review and the definition.Then,the paper reviews the history of local government debt and makes analysis of its present situation.It introduces the general situation of local government debt in our country in terms of size,growth,structure,source and use.It also analyzes the main problems of current local government debt.Then the paper theoretically analyzes the mechanism of the influence of local government debt sustainability.The decrease of local government financial income and rigid fiscal expenditure stress lead to local governments have the impulse of expanding the debt.However,the new "budget law" makes the local government debt explicit gradually,have to face rigid redemption risk,and finally become unsustainable.This paper expounds the constraints of sustainable debt through the theoretical model of sustainable construction of local government debt,which is made of intertemporal budget constraint model and no-Ponzi-game condition.Next,this paper uses the modified KMV model to make a simulated calculation about the moderate scale of local government debt from 2016 to 2018.It is found that that the moderate scale of local government debt is greater if the economy of the area is more developed.Finally,This paper puts forward countermeasures and Suggestions such as deepening the reform of the supply side,making a better connection between new debts and old debts,establishing local government debt risk early warning system and advancing the PPP mode. |
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