Abstract:Many transition policies,based on neoclassical economics,failed in Eastern Europe,Former Soviet Union,and China.The paper argues that the failure is due to the viability assumption of the neoclassical economics.The neoclassical economics implicitly assumes a firm to be able to earn a socially acceptable profit in an open,competitive market if the firm has a normal management.However,many firms in the socialist as well as transitional economies are not viable,that is,they will not be able to earn a socially acceptable profit in an open,competitive market even if they have normal management because they are in sectors in which the economies do not have comparative advantages.With the viability assumption,the policies,based on neoclassical economics,focus on issues related to property rights,corporate governance,government interventions and other issues related to firms management.However,many of those issues are in fact endogenous to the firms viability problem.Therefore,without addressing the firms viability issue,those policies fail to achieve its intended goals.Not only in the socialist and transition economies but also in developing countries many firms are not viable.The paper suggests to relax the viability assumption in the neoclassical economics when analyzing issues in socialist and transition economies,as well as in developing countries.

Abstract:Unlike devleoped securities markets and emerging securities markets,Chinas securities market has dual characters of transitional economy and newly developing economy.There are also particular characteristics in financial systems,participants behavior,and governmental regulations.The intrinsic instability of securities markets is endogenous and periodic.According to the specific conditions of Chinas securities market,this article puts forward some relevant policy recommendations:to implement hedge mechanisms when the conditions are mature,and to carry out credit securitis exchanges gradually;to widen efficient and sound financial avenues;to cancel the time limits of holding stock for three kinds of firms under proper conditions;and the Central Bank should change the contingent regulation policies into the real-time ones based on rules,to avoid illegal fund movement.

Abstract:The study investigates the effect of opening Chinas B shares market to the domestic investors on the market segmentation between A shares and B shares.The results show that there is no information diffusion between two markets before opening to domestic investors.After the event,there are significant information spillovers from A shares market to B shares market.Compared with the no information interdependence between A shares and H share shares listed in Hong Kong,the event reduces market segmentation between A shares and B shares.

Abstract:Through OLS estimating the standard IS-LM-AS model in 1981—2001,this paper attempts to build a small-scale annual macroeconometric model of China’ economy-CMAFM model, which is orientated to support demand management. Based on the historic simulation of CMAFM model, the dynamic multiplier effects of China’s fiscal and monetary policies are investigated respectively.

Abstract:This paper focus on estimation of value added of service sector in China.Value added of service sector in China has been significantly underestimated due to historical reason and some special characteristics of the sector.And growth rate of service sectors value added is more likely biased.Pervious works made attempt to re-estimate valued added of service sector,however,without exception,faced constraint of basic data required.The shortcoming of estimate of service sectors value added seriously harms any economic analysis and policy making that makes use of estimate of service sector.In the long run,better estimate of service sectors value added in China mainly depends on improvement of statistics and surveys that designed to record many aspects of service sector,under current condition,however,we still have a large room to improve estimates of service sectors value added.

Abstract:Based on the theory of fundamental equilibrium real exchange rate, this paper estimates the equilibrium exchange rate and the resulting misalignments in the PRC during the period of 1955～2000 applying modern econometric methodology. The results indicate that the real exchange rate of RMB was overestimated in the planned economy period until the beginning of the reform and opening. After the reform and opening, the real exchange rate in the PRC was underestimated because of the government interventions. However, during the Asian finance crisis 1997 and 1998, the real exchange rate of RMB was overestimated when the PRC Government adopted non-devaluation policy. The situation of overestimated was partially addressed in 1999 and took a turn for the better in 2000. This conclusion was supported by the rapid increase of the PRC export after 1999.

Abstract:Based on the split of AT & T in 1980s,this paper discuss and analyses which market structure,monopoly and competition,is in favor of the technology innovation.The model and empirical study shows,before the split,company size and capital investment on R&D is positive-correlated markedly.The focus of the paper is to reveal the relation between efficiency and competition.The final and more important conclusion is,efficiency and R&D are irrelevant before the split,but after the split,they are positive-correlated markedly.Market structure change,from pure monopoly to competitive monopoly,make AT&T increase their investment on technology,and to keep their advantageous position.in the market.

Abstract:Core employment instead of non-core employment,based on the participation,guidance,promotion and assistance to innovation with entrepreneurship,constitutes the cornerstone of the aggregate employment expansion of a market economy.One of the crucial causes resulted in serious unemployment and underemployment in transitional China has been the severe neglect of innovation and core employment in theory and policies.The ups and downs of the employment of a market economy are determined by the ones of core employment.The current levels of core employment in China have only reached around 25% in enterprises and 30% in total economic activity.In order to foster the total ratio to 80%,China will in theory have to change its way of SOE transformation,establish a balance mechanism among government powers,and improve the reform and development in rural economy.