Abstract:Policy distortion in factor markets can lower aggregate total factor productivity (TFP). This paper introduces a dynamic stochastic general equilibrium framework to quantify the extent of efficiency loss due to SOEbiased policy distortion in China. The theoretical model is characterized by monopolistically competing firms as intermediate goods producers, with exit and entry endogenized as optimal choices. Different stochastic processes of TFP growth distinguish stateowned firms and private firms that face different policy distortions in factor market. To fully reflect industrial characteristics, we use microdata on manufacturing establishments to perform a calibration exercise of the stochastic growth of firm level TFP in China. Misallocation from such biased policy distortions results in considerable efficiency loss.
Key Words:Resource Misallocation; TFP; Policy Distortion

Abstract:Based on the firm theory of efficiency maximization requiring the symmetrical arrangement of residual claim and control rights, the paper investigates theoretically and empirically the dual efficiency losses of stateowned enterprises (SOEs) in China. The ownership of SOEs determines that, in comparison with private enterprises, SOEs will have both productive efficiency loss and innovative efficiency loss. SOE reforms, through supervision and incentive mechanism designs, to a certain extent, improve SOE’s productive efficiency; however, due to the special characteristics of innovation, they can not improve SOE’s innovative efficiency. Hence, in SOEs, innovative efficiency loss will be higher than productive efficiency loss. The above hypotheses are verified by the empirical study by using Chinese industrylevel dataset in 30 provinces during the period of 1998—2003.
Key Words:Productive Efficiency Loss; Innovative Efficiency Loss; StateOwned Enterprises

Abstract:Although ownership is found as an important determinant factor to wage in a transition economy in the individual and macro level, there is little evidence about how ownership affect wage in firm level. Using a sample of A share listed firm from 1999 to 2009, this paper examines the impacts of ownership to wage differentials in firm level. This paper finds an significant SOE annual wage advantage after controlling for other firm characteristics. To be more specific, the results indicate that annual wage is significantly higher for common staffs of SOEs but not for managements. Differentiating central government controlled SOEs from local government controlled SOEs, we find that both the common staffs and managements of central government controlled SOEs get the highest wage. However, while common staffs of local government controlled SOEs get wage advantage over that of NSOEs, managements of local government controlled SOEs do not. Our findings are useful in explaining how ownership affects wage differentials in a transition economy, and will enrich the wage theory research.
Key Words:Transition Economy; Ownership; Wage Differentials

Abstract:Based on the neoclassical model and NBS database over the period 1999—2007, this paper uses GMM dynamic panel method to estimate the price sensitivity of business investment in China, and checks whether marketoriented reforms significantly increase the response of SOE’s investment to its capital cost. The results show that: (1) The capital cost sensitivity of investment is significantly negative, but very small compared to the net cash flow coefficient.(2)Investments of private and foreign enterprises are sensitive to capital cost, while the stateowned and collective enterprises’ are yet not.(3) Marketoriented reforms markedly weaken the financing constraints of all business types, but do not improve the capital cost sensitivity, especially SOE’s. Accelerating the pace of interest rate liberalization and deepening the reform of SOE are necessary for improving the effectiveness of pricebased monetary policy tools.
Key Words:Corporate Investment; Capital Cost Sensitivity; Interest Rate Channel; Credit Channel

Abstract:By releasing the hypothesis of complete competition, the paper extends the Manager’s Career Concern Model, and on which it investigates the relationship between heterogeneous institutional investor, the nature of firm and innovation in China, followed by empirical tests based on data of 923 enterprises of Chinese listed companies from the year 2004 to 2009,with the innovation measured by R&D input and patent application. The results show that ownership of investment fund is associated with less innovation in stateowned enterprises than in private companies, and QFII ownership put a positive effect on innovation in private companies rather than in statedowned enterprises, while insurance fund ownership leads to more innovation in both two categories of enterprises. We also find that institutional ownership has a significant positive impact on innovation in private companies, but negative in stateowned enterprises. Further, institutional overall ownership has an insignificant positive impact on patent application, compared with a significant negative effect on R&D input. Accordingly, the paper gives some advices on how to improve innovative capacity of different type of Chinese listed companies.
Key Words:Institutional Investor; R&D Input; Application of Patent; Independent Innovation

Abstract：Based on the VAT Reform in China in 2009 and the IncomeTax Reform in 2008, this paper investigates how Value Added Tax (VAT) and Income Tax Reform will affect corporate value in China. Our empirical evidences show that investmentsubsidy effects are more important than the incometax effects in the Reform, and the positive effects become more significant when incometaxrates are lower. Which means that our tax reform overall enhances the allocation efficiency in the capital market. Our research helps to understand the significance of the current Tax Reform, and also give important theory implications.
Key Words：ValueAddedTax Reform; IncomeTax Reform; Valuation of Corporate Capital Expenditure

Abstract：To measure the risk exposures in Chinas macrofinancial system, we first used contingent claims approach to calculate the riskadjusted balance sheets of the main sectors of the economy. We then illustrated how the value of implied assets, implied asset volatiltiy and risk indicator, like DD, had evolved from 2000 to 2008 The CCA approach was further applied to analyzing and quantifying the strong nonlinearities that are characteristic for the accumulation and transmission of risk in macrofinancial system. And sectorlevel market leverage and implied asset volatility were highlighted as key interacting factors that play an important role in the increase of a sectors vulnerability to shocks and contagion.
Key Words：Contingent Claims Analysis;  MacroFinancial Risk; Flow of Funds Accounts

Abstract：From the perspective of real-time analysis, this paper, based on the final estimates, quasi-final estimates, and real-time estimates of Chinas quarterly output gap derived from six detrending methods, constructs four kinds of forecasting models to predict Chinas inflation rate, analyzes the effects of output gap revision and variations in lag length on inflation forecasting, and further evaluates the usefulness of output gap for predicting inflation and the applicability of Phillips curve in inflation forecasting. The results show that the predicted inflation values in real time are less accurate than those based on final data, and the introducing of time-varying lag lengths has more important effects than output gap revision on forecast accuracy. More importantly, although output gap estimates appear to be quite useful for predicting inflation in final data analysis, it does not provide any useful information in real time forecast, which means the “output-inflation” type of Phillips curve is not suitable for Chinas inflation forecast.
Key Words：  Inflation Forecast; Phillips Curve; Output Gap; Real-time Data

Abstract：Given the fact that credit expansion has been an important driving force of modern business cycle, this paper builds an extended Svensson model, which incorporates credit expansion and business cycle features, to study the driving factors and macroeconomic implications of credit expansions induced by the extrapolation bias in estimating credit losses. It is found that, using Chinas data since 1984, after the credit expansion, the inflation pressure lasts at least 7 quarters while the output gap cease to rise after about 4 quarters. It also concludes that the optimal change in credit aggregates could enhance macroeconomic stability if it  were well directed. The cointegration analysis shows that the reserve ratios are high when credits are expanded. It is suggested to keep monitoring and directing the credit aggregates closely.
Key Words： Credit; Bank; Monetary Policy; Inflation

Abstract:By introducing borrowing constraints and precautionary saving into a standard consumer optimization model, the paper derives a framework for an empirical study in the wealth, signaling and asymmetric effects of stock market on China’s private consumption. In contrast to the most relevant studies, the results show that if we not only take into account of wealth effect but also signaling effect, the stock market affects China’s private consumption significantly. If we measure human capital with average wage level instead of disposable income per capita, the wealth effect is also statistically significant and asymmetric. While changes in stock prices, which reflects fundamental factors, have long run effects on consumption, changes caused by speculative factors have little or no effect on consumption.
Key Words:Stock Market； Wealth Effect； Signaling Effect；  Private Consumption

Abstract:Based on the Mitchell’s international historical statistics and Maddison’s historical statistics, this paper analyzes the factors influenced the long run growth. The fact that the decelerating of GDP growth appeared in developed countries linked tightly with the decelerating of productivity growth, which caused by the service sector development. So, this paper illustrates the view of structural accelerating and structural decelerating in the long run growth.  On the one hand, our understanding about the long run growth trend is systematized by this view, on the other hand, some problems related to the transition from structural accelerating to structural decelerating could be interpreted and forecasted easily. China’s economic growth would encounter such problems in the near future, and this view could provide a useful tool for understanding the questions.
Key Words:Economic Growth;  Structural Accelerating;  Structural Decelerating     

Abstract:This text explores whether prices of foreign agricultural products affect Chinese domestic prices of foreign agricultural products. Other factors controlled, we certify that foreign prices have affected domestic prices significantly by economic sense. Degree of response to foreign prices differs among various kinds of agricultural products. Foreign price elasticity of corn, rice and soybean’s domestic price range from 0.20 to 0.36, but elasticity of wheat’s domestic price is only 0.05. This shows the integration of domestic and foreign prices has been established through international trade. Chinese government should alleviate price rising aroused by foreign market through the means of supporting agriculture more and enlarging stock of agricultural products.
Key Words:Prices of Agricultural Products; Market Integration; Foreign Price Elasticity; Trade of Agricultural Products