Abstract: In an international, provincial and dynamic perspective, this study attempts to synthesize the experience of China’s macroeconomic control, and provide outlook for its future path in the post crisis period. Specifically, the paper begins an econometric investigation on the international evidence for the output fluctuations and stabilization policies between developed and developing countries, in order to show the stabilization policies with Chinese characteristics. The paper further presents ‘Chinese experience’  of structural macro control by the provincial analysis and its challenge to the mainstream economics, as well as the overlap between them. Finally, looking forward to the future, the paper provides the new thinking of macro control in post crisis period: (1) adhering to the direction of macroeconomic control: speeding up the economic restructuring and focusing on supply side management; (2) changing the main objective of macroeconomic control: from industrialization to urbanization; (3) perfecting the infrastructure of macroeconomic control: promoting the market-oriented reform and mitigating the government-driven effects; (4) broaden the vision of macroeconomic control: paying more attention China’s impacts on the world development and reinforcing international policy coordination.
Key Words:Post-crisis Period; Reflections of Mainstream Economics; Structural Macro-control
JEL Classification:E20， E60

Abstract:This paper employs directional distance function to estimate environmental total factor productivity and its decomposition in Chinese industry between 1980 and 2008. The results reveal that the restriction of energy and emission hinders the improvement of productvitity and then calls for the implementation of strict but appropriate environmental policies. What the most important finding is that the environmental regulations implemented in China since the reform did substantially improve the real industrial productivity，especially between 1996 and 2002. We refer to this as green industrial revolution, necessary for productivity promotion，transformation of growth mode and Chinese industrialization.
Key Words:Green Industrial Revolution；Directional Distance Function；Environmental Total Factor Productivity
JEL Classification:D24，Q51，Q56

Abstract:The paper studies optimal taxation and public spending composition in the framework of long-run economic growth based on the combination of Chamley model and Barro model. The first best and second best conditions of taxation and public spending are discussed using two-stage backward induction，and the explicit solutions of optimal taxation and public spending are showed in a special example. Finally we estimate the optimal level of macro-tax burden in China by numerical simulation.
Key Words:Optimal Taxation; Optimal Public Spending Composition; Economic Growth; Macro-tax Burden
JEL Classification:H21， H50， O41

Abstract:The issue of climate change has become a global concern. Under the background of climate change，exploring a low-carbon economic development model is the common choices of different governments. As the world top emission country and the largest developing country，China needs to find a way to balance the economic development and carbon emission reductions. As an effective method for achieving emission reduction，carbon tax has always been advocated by governments all over the world. This paper begins with micro perspective and carefully considers the characteristics of China’ s economic development in the current stage. By applying the dynamic optimal tax model with welfare maximization under the constraint of economic growth，the paper finds the optimal path of carbon tax，and further estimates the macroeconomic impacts of carbon tax using a CGE model. We conclude that carbon taxes are in favor of carbon emission reduction, energy efficiency improvement and industrial structure adjustment. We find that the optimal carbon tax in China is a dynamic and progressive process along with economic growth. We propose that with stronger social affordability in the process of economic growth，the carbon tax can be increased gradually. In practice，we believe a relatively low carbon tax at the beginning would protect the economy and society from large shocks due to carbon tax.
Key Words:Optimal Carbon Tax； Carbon Dioxide Emissions； Industrial Structure Adjustment； Macroeconomic Impacts
JEL Classification:Q54, H21，P28

Abstract：Base on a theoretical model of optimal local government expenditure size，this paper studies the effects of the government structure and fiscal decentralization on local government expenditure size by utilizing Chinese county level panel data for the period 1997—2005. We estimate both a static fixedeffects panel model and a dynamic panel model with accounting for possible endogeneity of the explanatory variables. The dynamic panel model shows that the hierarchical levels of governments have an expanding effect on local government expenditure size，while the number of jurisdictions has a constraining effect on it. We also find that expenditure decentralization leads to a larger local government，and revenue decentralization is associated with a smaller local government. It is further found that the effects of the two types of decentralization on local government expenditure size are to a certain extent conditioned by the features of fiscal decentralization and the government structure.
Key Words：Fiscal Decentralization; Government Structure; Local Government Expenditure Size
JEL Classification：H70，H72

Abstract：To assess the state enterprise reform in China，it is important to examine the relationship among ownership structure，CEO stock incentives and corporate governance. From the perspective of earnings management，this paper analyzes the corporate governance effect of CEO stock incentives after the reform of non-tradable shares. The paper finds that CEO stock incentives，as measured by the percentage of shares and options in total CEO compensations，are negatively related to earnings management for publicly listed firms which have not declare CEO stock incentive plans. This negative relationship becomes statistically insignificant for firms which have either formally announced or approved CEO stock incentives plans. In addition，there is strong evidence that earnings management is positively related to the probability of stock options exercises by the CEOs. Moreover，industry adjusted ROA significantly declines after a CEO exercises his stock options. The findings of this paper indicate that CEO stock incentives have negative effect on corporate governance. Therefore，to strengthen the effectiveness of corporate governance，the Chinese government should continue to deepen state enterprise reforms and foster a more vibrant modern enterprise system.
Key Words：CEO Stock Incentives; Earnings Management; Corporate Governance; Reform of Non-tradable Shares
JEL Classification：G32， G38， M40

Abstract: The successful agricultural policies depend not only on the policy implementation environment，but also largely on farmers’ response to policy stimulus intensity. In order to analyse the effects of China‘s agricultural policy，this paper uses adaptive expectations models proposed by Nerlove to study the adjustment capacity of China’s food production and agricultural policies effects. Based on 1995—2008 China‘s provincial agricultural panel data，we estimate the influence coefficient of agricultural policies on acreage，yields and total production of wheat，rice，maize crop using dynamic panel GMM way. Furthermore, we analyze food production-adjustment ability and long term effects of agricultural policies. The empirical results show that China’s food production-adjustment ability gradually increases with government investment in agriculture，and the various agricultural policies have significantly positive effect on food production. The agricultural expenditure and rural fixed assets investment policy are the most important factors on China‘s food output growth. But it is relatively weak that expected price level on food production，and the price leverage of market economy is not obvious.
Key Words：Food Production-Adjustment Ability; Agricultural Policies; Adaptive Expectations Model; GMM-DIFF of Dynamic Panel Model
JEL Classification：Q18， O13， C23

Abstract:Supposed that the main factor of city government’ s development of household restriction policy is GDP and public welfare growth rate，a model of optimal household policy will come to conclusions: Household restriction which was set by the city government has a negative correlation with rate of return on local human capital，tax rate on citizen，the contribution rate of human capital to local GDP growth and the attractiveness to foreign labor of surrounding cities，as well as a positive correlation with the attention of city government to local citizen’   s welfare growth. Small cities which initially have a low level of public welfare will naturally reduce or even eliminate their household restriction，whereas metropolitans which have a high level of public welfare would enhance their household restriction and eventually stabilized in a tight degree. The deductions above have rich policy implications to identify a series of “Leverage Solutions” for household policy reform which aimed at reducing city household restriction. These solutions include: implement the GDP oriented assessment to city government and people’  s livelihood oriented assessment to large administrative region government; authorized city government to levy “homing special tax”; promote the development of small cities，urban tertiary industry，independent innovation strategies and the equitable distribution of social security and educational resources nationwide.
Key Words:City Government; Household Restriction; Per Capita Public Welfare; Marginal Congestion Costs
JEL Classification:J42， J61， R23

Abstract: In a health care market where the provider has market power and for profit，introducing health insurance will cause health care price inflation and offset the effect of health insurance. We study the price effect of New Cooperative Medical System (NCMS) of rural China theoretically and empirically. Using village and county level panel data and employing difference-in-difference method，we find that NCMS has no impact on village clinic price，but will cause a rise of county hospital price. Furthermore，the higher the reimbursement ratio，the higher the price and the percentage of price increasing is almost equivalent to reimbursement ratio. The results testify the theoretical prediction that the monopoly power and profit target of county hospital will cause price going up after NCMS. So improving the competition in suppliers is necessary in NCMS.
Key Words:Health Care Market; New Cooperative Medical System; Health Care Price
JEL Classification:I11，I19

Abstract：The paper presents an empirical study to explore comovement between the stock market of China and US. The paper collects the open price and close price of Shanghai Stock Exchange Composite Index (SSEC) and Dow Jones Industrial Average Index (DJIA). The samples are from December 12，2001 to January 23，2009. The samples are divided into four subsamples by important events， which are QFII， reformation of Renminbi's exchange rate， QDII. There exists no cointegration between the two markets. By fulfilling the Granger causality test and considering the non-synchronous trading problem，the results show that stock price changes in the US have remarkable impact on that in China at the latter part of the period. More specifically，price changes in the US can be used to predict the price of China's stock market on next day. Based on the DCC-Multiple GARCH model， the evidences show that there is stronger volatility spillover from US to Chinese stock market. Chinese stock's open return influenced by US close return is reflected as a left-down-and-right-up U curve by using quantile regression model. The return relationships between the two stock markets are robust after using rolling windows techniques. Finally，some advices and policy suggestions are put forward.
Key Words：Stock Market; Comovement; Spillover Effects; Quantile Regression
JEL Classification：G10，G15