A Quantitative Study Of The Subnational Government Debt Risk Of Hunan Province

The wave of the US financial crisis in 2008 has caused the global economy to stagnate.In order to stimulate the growth of domestic demand,China has continuously introduced policies to encourage the government to finance itself.Although the development history of local government debt in our country is not long,the scale of local government debt development has been increasing rapidly.At the end of 2016,the measures for the disposal of local debt issued by the State Council,which reflected the state' s concern and concern over the high level of local government debt.At present,domestic research mostly focuses on the generation and characteristics of local government debt risks,and the quantitative research on the early warning and prevention and control aspects of constructing debt red lines and debt risks needs to be improved.the traditional government debt scale risk measurement index with the core of debt ratio is not entirely applicable to the particularity of China's national conditions in the risk appropriation of local government debt.This paper uses the improved KMV model to build a debt-debt ratio index for all levels of government debt in Hunan province at the end of 2016 based on the debt data of local governments at all levels in Hunan Province from 2014 to 2016,in the hope of replacing the debt-based tradition.The indicator addresses the issue of ignoring the volatility of local government debt balances and fiscal revenue based on time series.This article combines the authoritative scholars' research results and the local government's financial revenue and expenditure levels to propose three kinds of guarantee ratios,and measured the debt depreciation rates of the different levels of government agencies at all levels in Hunan Province.Subnational governments of Hunan Province should continually improve the skills to manage debt,and reasonably utilize the debt by focusing on economic situations.They should also avoid raising debt blindly and should increase the transparency of fiscal information.Budget constraint should be gradually hardened,and repaying the debt through excessively reducing the common welfare of citizens is not acceptable.