Abstract:The trend and fluctuations in quarterly GDP have great influence on the revenue and expenditure of governments, the profits and financial situation of corporate, and even have effects on the income and expenditure of families and individuals. They are the key variables in macroeconomic forecasting, prediction and analysis. Traditional macroeconomic forecasting models are based on the same frequency data, high frequency and ultra high frequency data must be change into low-frequency data, which ignored the information of high-frequency data, and timeliness of forecasts and the accuracy of prediction are decreased. Mixed data sampling (MIDAS) models are used for forecasting and nowcasting Chinese quarter GDP, and empirical results show that the export is the major factor caused the depreciate of Chinese economic growth during the period of financial crisis. The results verify the comparative advantage of MIDAS models in the accuracy of macroeconomic short-term forecasting, and have significant feasibility and timeliness in nowcasting.
Key Words:Mixed Frequency Data; MIDAS Model; GDP; Nowcasting; ShortTerm Forecasting; Timeliness
JEL Classification:C53, E32, E17

Abstract:The general view is when macroeconomic performance is that supply exceeds demand, government will use expansionary fiscal policy to resist the recession. So the economic recession is the reason, and the expansionary fiscal policy is the result. However，this article finds that China’s expansionary fiscal policy is also the reason of the economic unbalance，so the two phenomena exist the relation of cumulative causation. The reason is that: the regressive tax system intensifies the restriction of resident consumption, and impels the share of government and enterprise in the national revenue to increase; the imbalance of supply and demand easily lead government fiscal expenditure expansionary and tax growth, so it will reinforce the economic imbalance; despite economy faces the serious structure imbalance, the tool choice of government economy policies has great restriction, so the fiscal policy may impel economy growth in short time, but it may cause a new round of economy recession in long run.
Key Words:Tax Structure; Fiscal Policy; Structural Unbalance
JEL Classification:E10, E62, H50

Abstract:The paper sets up a small open economy dynamic stochastic general equilibrium model to study the effects of nominal policies on the dynamics of trade imbalance adjustment under both capital control and capital flow environments. The analysis shows that, the price adjustment policy cannot reduce the trade surpluses quickly, and it will produce large fluctuations of output and inflation. While a fast adjustment of exchange rate will rebalance trade rapidly, raises no fluctuation of output and inflation under both capital control and capital flow environments. From the prospective of welfare, the fast adjustment of exchange rate is better than the price adjustment policy, and adjustment under capital flow is better than adjustment under capital control. The model calibrated by China’s data shows that the inflation is forced to rise under the slow adjustment of RMB exchange rate, which may be a factor which raises the fluctuation of China’s economy after the reformation of RMB exchange rate in 2005.
Key Words:Trade Imbalance; Monetary Policy; Capital Flow; Welfare
JEL Classification:F47, E17, D60

Abstract:This paper uses a specificfactors framework of 2 final goods in a small country case to investigate factor price effect of outsourcing. By taking land and skilled labor as a specific factor, we find that fragmentation will benefit the specific factors, hurt unskilled labor, and enlarge the skilled and unskilled wage gap through the mechanism of productivity effect and factorsupply effect. This conclusion is irrelevant with international capital mobility, factor intensity and complete or incomplete specialization of fragmentation at equilibrium. However, unskilled labor training may not relax the relative wag gap in home country.
Key Words:Specific Factor Model；Outsourcing；Factor Price； Relative Wage
JEL Classification:F11, F16

Abstract:The issues of scale of operation have been one of the hottest topics, which are concerned by the academics and policy-makers. In the paper, empirical studies have shown that taking the effect of land fragmentation into account, there are almost no significant economies of scale in China’s grain production. So, the large-scale land management policy, which considered just from promoting grain output angle, is undesirable. It is also found that, except Japonica rice, the land scale management has a significant negative impact on the total cost in production. That means the expansion of land scale could reduce the cost of production. In fact, given other conditions unchanged, due to the existence of economies of scale, cost reduction is essentially consistent with economic efficiency. So from this perspective, the expansion of the scale of agricultural operation is conducive to the promotion of farmer’s income.
Key Words:Appropriate Scale Management; Economies of Scale; Returns to Scale
JEL Classification:D24, Q15, R15

Abstract:Using the census data of inter-provincial transport freight turn-over collected by Chinese Transport Ministry in 2008, this paper introduces transport variable based on gravity equation and uses the equation to test on the impact on regional economic integration of transport infrastructure. The empirical results indicate: (1)The border effect of China’s inter-provincial trade in 2008 is between 6—21, which is similar to that of the trade between developed countries; (2)The improvement of transport infrastructure has generated positive impact on China’s regional trade; (3) As transport infrastructure becomes more developed, the border effect of trade is decreased, which means that transport infrastructure contribute to promote regional trade mainly through inter-provincial trade. All of that indicates the positive impacts on regional integration of the improvement of transport infrastructure.
Key Words:Transport Infrastructure; Regional Integration; Gravity Model; Border Effect; Instrumental Invariable
JEL Classification:L98,H70,R11

Abstract：Social Networks can lessen the problem of asymmetric information, thus can promote folk credit. Using data from rural China, this paper finds that the more social network one has, the more likely he can borrow money from his relatives and friends, the more likely he can establish a business. The initial investment and following growth of enterprises are relying on folk credit to a large extent. We also find that, the effect that social networks has on self\|employment is larger in places where formal finance is less developed. This indicates that informal finance which relies on social networks can make up the failure of formal financial development in rural China.
Key Words： Guanxi; Folk Credit; Self\|employment; Informal Finance; Rural China
JEL Classification：I32, O15, P36

Abstract：Using the 2005 Chinese Longitudinal Health Longevity Survey (CLHLS) data, this study estimates a set of medical care demand functions for the elderly aged 65 and above. The major findings are as follows. First, the medical insurance coverage primarily increases the intensity of medical care use when seeking care, rather than the choice of seeking care in general. In the meantime, the insurance coverage improves access to care for those who do need care. Second, the insurance coverage also helps reduce the financial burden of illness both in terms of changes in family\|paid expenditures and relative ratios to total expenditures, in a range of 25% and 50% respectively. Third, both urban medical insurance and the government insurance have greater impact than other insurance policies as expected. Our basic conclusion is that the national medical insurance policy does increase access to care in general, with greater benefit effect on demand for necessary care, indicating an efficiency improvement in allocation of resources. Therefore, further developing the universal medical insurance policy is not only a core task of the state health reform, but also a right effective approach for China to meet the increasing challenges of aging population.
Key Words： Aging; Medical Insurance; Medical Care Demand; Health Reform
JEL Classification：J140, H110, I110

Abstract：Comparing with their American peers, Chinese firms are more reluctant to implement succession planning. We think this phenomenon can be understood as an ambiguity strategy to reduce the cost of screening the types of potential successors. In an environment where the professional managerial market is underdeveloped, such an ambiguity strategy can help Chinese firms reduce the danger of selecting disloyal successors. Through a simple model, we find that the proportion of loyal manager has a positive effect on the likelihood of implementing succession planning, and the losses from disloyal managers’ misbehavior have an negative one. In addition, we find that the more a firm’s current leader cares about the firm’s long\|run development, the more likely the firm is to adopt the ambiguity strategy, and is more reluctant to implement succession planning.
Key Words： Screening; Strategic Ambiguity; Succession Planning
JEL Classification：D82, D86, M51, M59

Abstract：As an emerging asset management model, privately offered fund and its investors form a principal agent contract in essence. Based on the corporate finance analytical framework and theory of Tirole (2006), this paper examined the principal agent relationship between the managers of privately offered fund and the external investors, and figured out the optimal asset under management and share\|cropping proportion of private fund. Finally, we used numerical calculation to discuss the outcomes from this theory. The results indicated that the optimal asset under management and share\|cropping proportion of private fund do exist, that the prevailing “2—20” contract is not optimal but reasonable only with the combination of certain parameters, and that the performance fee of privately offered fund contributes to the reduction of moral hazard by its managers.
Key Words： Privately Offered Fund; Asset under Management; Incentive Contact
JEL Classification：G00,D89,G30,C70

Abstract：There have been some controversies in academia about whether price support exists in China’s IPO market. By using analyst coverage data within one year of the offering date, we analyze the behavioral characteristics of underwriters providing favorable analyst coverage to support the IPO firm’s stock prices and market response to the biased coverage. Main conclusions are as follows: (1) firms with poor aftermarket performance are given more favorable，biased coverage, especially by analysts affiliated with underwriters, and this favorable coverage is relatively short lived, typically lasting less than ninety days; (2) reputation concerns could effectively restrict underwriter\|affiliated analysts to provide protection in the form of stronger coverage after ninety days of the offering date; (3) investors could see through the underwriters’ attempt to provide price support and adjust their trading response. In this paper, we not only provide new and direct evidence for the price support behavior of China’s underwriters, but also help people understand the interest confliction of analyst coverage, meanwhile, our paper also provides reference for the government to establish regulation policy.
Key Words： Underwriter; Price Support; Analyst Coverage
JEL Classification：G24

Abstract：The institutional paradigm in financial analysis has been drawing widespread academic attention and is forming a mature framework. The paper intends to deliver a tentative review of the latest developments in this field. Institutional finance initially took shape in the model of functional and structural finance forwarded by Merton, etc. Then, by endogenizing some key institutional factors in monetary economics that had long been existing in the macroeconomic context, Stiglitz retrieved its micro\|institutional foundation, though the micro perspective failed to touch the financial rights behind the performance of monetary economy. However, Soto discovered them and made a thorough analysis of the institutional implications of monetary finance ownership. Later, the introduction of division of labor, money, credit, law and government into general equilibrium by Borland and Yang illustrates the nature of money as well as the implications of the development of monetary system. And the subsequent acceptance of financial entrepreneurship into the financial intermediation theory has helped the evolution and structure of financial institutions and financial entrepreneurs enter officially the core theoretical framework of institutional finance.
Key Words： Institutional Finance; Structure of Financial Property Rights; Endogenous Nature of Monetary System; Financial Entrepreneur; Review of Literature
JEL Classification：B25, G29, P34