Economic Effect Analysis Of China's Fiscal Policy

At present,the global economic growth is slowing down,trade frictions are escalating,manufacturing production and international investment are shrinking.Continuously accumulating high debt and deteriorating credit quality make financial market risks continue to increase.At the same time,led by the United States,a new round of competitive tax cuts has been launched worldwide.Faced with such a severe and complex external environment and increasing downward pressure on the domestic economy.The Chinese government has always been focusing on "releasing water and raising fish," vigorously implementing supply-side structural reforms,and changing the status quo of imbalanced industrial structure;vigorously promoting a proactive fiscal policy of reducing taxes and fees,stimulating consumer demand growth,increasing corporate profitability,and improving business surroundings.In order to analyze the effect of China's active fiscal policy in the context of tax reduction and fee reduction,this paper comprehensively considers the predecessors' literature and uses a dynamic stochastic general equilibrium model with a microeconomic foundation to study the economic effects of fiscal policy.The model is divided into three sectors: family,business,and government: assuming that the family sector is a representative Ricardo family,and choose labor and consumption when its first use is maximized;the enterprise sector produces intermediate and final products,and has a New Keynesian Features such as price stickiness;government departments implement fiscal policy and Taylor's monetary policy.Empirical research based on Matlab software finds that: first,active fiscal policies have a positive effect on the economy and can stimulate output levels to rise in the short term;second,different fiscal policy tools have different mechanisms for affecting economic variables,and government consumer spending It is completely inconsistent with the impact path of investment expenditures.Third,the economic effect of government tax reduction policies is better than government expenditure policies,and structural tax reduction policies are more prudent.The impact on output levels is long-term.Based on the analysis of the above model,this paper believes that fiscal policy should play a greater role in supporting the adjustment of industrialstructure,using the advantages of extremely low long-term interest rates,and expanding public investment to support short-term demand and future prosperity.Deepen industrial structural reforms to offset negative supply shocks caused by trade frictions and transnational investment,increase long-term output levels and increase employment opportunities.