Economic Research Journal (Monthly) Vol.47 No.4 April, 2012 |
• The Estimation of China’s Infrastructure Capital Stock |
Abstract:Infrastructure is a number of basic structures needed for a country’s development. And it is needed of a set of nationallevel and provinciallevel data of infrastructure capital stock to study the contribution of infrastructure to economic growth. For this purpose, the paper demarcates the range of infrastructure investment, and then estimates China’s infrastructure capital stock at nationallevel for 1953—2008 and provincial level for 1993—2008, respectively, using the adjusted official statistical data and perpetual inventory method.
Key Words:Infrastructure; Capital Stock; Investment |
…………………………Jin Ge (4) |
• Productivity Changes and Heterogeneity in China’s Service Sub-industry |
Abstract:This paper measures the growth rates of total factor productivity (TFP), technological progress, pure technical efficiency and scale efficiency in China’s service industries from 1990 to 2010, using sequential DEAMalmquist productivity index method, based on the revised data after the first and second national economic census and the assumption that “technology will not be forgotten”. Empirical results suggest that services TFP in overall level and subindustry level are all rising. The dominant factors leading to TFP growth are technical efficiency improvements in the 1990s and technological progress after 2000. Technical efficiency improvements have gradually transformed from pure technical efficiency to scale efficiency, while the extensive features of service industries development are still evident. Meanwhile, China’s services TFP growth demonstrates strong heterogeneous pattern and lags behind that of manufacturing industries. From 1991 to 2010, the interindustry heterogeneity of technical efficiency and TFP has decreased, while that of technological progress is increasing. Possible intrinsic mechanisms are the heterogeneous effects of modern information technology on the resource allocation of the different service firms and the gradual path of service industries’ institutional reform in China.
Key Words:China’s Service Industry; Productivity Changes; Industry Heterogeneity; Sequential DEA |
…………………………Wang Shuli and Hu Zongbiao (15) |
• Households’ Wealth in Urban China: A Behavioral Perspective |
Abstract:This paper first provides a theoretical framework to illustrate how various factors affect and determine households’ wealth. By empirically analyzing 2007 survey data from Aordo Research Center of Investment, we then estimate the wealth function of Chinese urban households; and particularly examine the important role of householders’ subjective and behavioral characteristics in the process of wealth accumulation. Results find that it will benefit the growth of wealth level to increase householders’ investment participation and risk preference. Moreover, compared with the households of low income or in relatively poor regions, the positive impacts of investment participation and risk preference on the wealth level of households of high income or in developed regions are more significant. At last, we make some suggestions to the government on how to promote households’ wealth level.
Key Words:Inequality; Wealth Distribution; Behavior; Investment Participation; Risk Preference |
…………………………Xiao Zhengyan and Liu Kai (28) |
• Measurement and Decomposition of Household’s Vulnerability in Rural China |
Abstract:Vulnerability can combine inequality with volatility of household’s consumption to reflect household’s welfare level. Based on utility theory, this paper discusses the vulnerability definition and decomposes it to investigate inequality and volatility of household’s consumption. We use CFPS data to analyze household’s vulnerability in rural China. The results show that the majority of rural households are vulnerable, and comparing with the intervillage inequality, intravillage inequality is the main source of vulnerability. We also find that increasing rural household’s income is the most effective method to decrease its vulnerability. Enhancing average educational level of household’s labors can effectively reduce it, but expenditure on higher education can significantly increase it. The new rural cooperative medical system and social insurance are capable of decreasing it to a large extent. Social capital, family size and a higher labor force ratio are conductive to decreasing it, which can effectively explain why households in rural China tend to be big ones, and frequent ceremonial activities among relatives and friends.
Key Words:Vulnerability; Covariant Risk; Idiosyncratic Risk; Social Capital |
…………………………Yang Wen, Sun Bangzhu and Wang Xuelong (40) |
• Does Ownership Nature Affect Tax Sensitiveness? ——Evidence Based on Firm’s Labor Demand |
Abstract:Research in the West shows that corporate tax is an important determinant of labor demand. Does this theory apply in China? Most listed firms in China are statecontrolled. Does this special background affect the relationship between corporate tax and labor demand? Using the corporate income tax reform in 2007 as an opportunity, we firstly test whether the theory about the relationship between corporate tax and labor demand applies in China. Based on this, we further test whether different ownership nature affects the relationship between corporate tax and labor demand. The results suggest: Both the reduction in corporate tax rate and the increase of “Employment Tax Credit” significantly improved the firm’s labor demand; Further research suggests that the effect of the change in tax rate and “Employment Tax Credit” was significantly lower for statecontrolled firms than nonstatecontrolled firms. Our result shows that tax is an important determinant of firm’s labor demand, but state ownership weakens the relationship. This paper not only enriches the related international literature, but also has policy implication for employment policy making in China.
Key Words:Ownership Nature; Tax Sensitiveness; Firm’s Labor Demand |
…………………………Wang Yuetang, Wang Guojun and Peng Yang (52) |
• An Estimate of the Degree of Nominal Wage Rigidity in China |
Abstract:This paper is the first one studying the degree of nominal wage rigidity in China using microdata. Resudts find that the degree of wage rigidity is very low in China compared to that in the United States and some European countries. This suggests that the adjustments in Chinese labor market are flexible enough when facing economy fluctuations, then positive monetary policies will push up the price level instead of the aggregate output. The analysis is applied to many groups (e.g., by income and occupation) to assess how wage rigidities vary across groups. What’s more, this paper provides an estimation of downward rigidity and upward rigidity creatively. The results show an increasing downward rigidity since 2002, while the trend of upward rigidity is not pronounced.
Key Words:Labor Market; Nominal Wage Rigidity; Keynesian School |
…………………………Xu Jianwei, Ji Yang and Chen Binkai (64) |
• The Change of Income Differentials between Public and Nonpublic Sector in China |
Abstract:Basing on the theory of dynamic evolutive sociological stratification, this paper raises a new hypothesis—stages of income differentials between public and nonpublic sector. Then through the empirical analysis of CHNS’s panel data we test the hypothesis. At the high end of income, income in nonpublic sector is remarkably higher than public sector for the years 1989—1997. At the same time, the income differentials between nonpublic and public sector are becoming more and more with higher income at the high end of income. The return in education is lower in public sector than nonpublic sector. However, from 2000 to 2009, income in public sector is clearly higher than nonpublic sector at the low and middle end of income, and income in public sector is not difference with nonpublic sector at the high end of income. The return in higher education in public sector is close to nonpublic sector. Moreover, the effect of sector characteristics contributes to major income differentials between public and nonpublic sector at the low and high end of income. These results prove the hypothesis, and provide inspiration to adjust structurally Chinese income distribution.
Key Words: Public Sector; Nonpublic Sector; Income differential; Stages |
…………………………Zhang Yibo (77) |
• Is Money Neutral in Long Run:An Empirical Study for China Based on Fisher-Seater’s Definition |
Abstract:Based on FisherSeaters operational definition, this paper clarifies the meaning of LRMN from two sides, including the classification of monetary shock and distinction between long run relationship and long run effect. This paper reviews three methods used in literature, which are cross sectional regression,time series regression and auto vector regression. Using Chinese quarterly data during 1994—2010, we find few obvious evidences against LRMN based on the latter two methods.
Key Words: Long Run Monetary Neutrality; VAR Models; China |
…………………………Zhang Weiping and Li Tiandong (89) |
• Impacts of Dollar Depreciation on China’s Inflation: Transmission Channels and Effects |
Abstract:Combined the technique of directed acyclic graph (DAG) with the approach of structural VAR model (SAVR), this paper, respectively from the perspective of costpush, assetinput and monetary expansion, has made an empirical study on the transmission channels and effects of dollar depreciation on Chinas inflation. From the costpush view, dollar depreciation will rapidly stimulate domestic industrial producer price, the transmission effects from energy price, food price, and metal price are rather significant, but there exists a certain delay when dollar depreciation stimulates domestic consumer price, and mainly depends on the transmission from food price. Additionally, effects of international commodity price on Chinas inflation focus more on the production areas. From the assetinput view, the decline of U.S. federal funds rate and dollar index will lead to structural increases of real estate sales price and capital market price in China, and thereby stimulate domestic inflation, in which the transmission effects of shortterm capital flow and market interest rate are more significant. From the monetary expansion view, effects of dollar depreciation on domestic producer price are more significant, and monetary expansion exerts influences on Chinas inflation,especially consumption areas, mainly through foreign exchange reserves and expectation of Renminbi appreciation. This study shows that China is currently subjected to high pressure of imported inflation.
Key Words: Dollar Depreciation; Inflation; DAG; SVAR Model |
…………………………Hu Yuancheng and Zhang Chaoyang (101) |
• Fighting Against “Triffin Dilemma”——The Stability of the Credit-Based National Currencies as International Reserve Currencies |
Abstract:This paper focused on the relationship between the evolution of the international monetary system and the stability of the creditbased national currencies as international reserve currencies. And we found some important results. Firstly, we found, in the bretton woods system, that the growth rate of the gold reserve and the yield of the dollar were main factors influencing the stability of the dollar reserve asset and the problem of triffin dilemma. Secondly, we found, in the current international monetary system, that the real economic growth rate and the inflation rate and the yield of the dollar were important factors affecting the stability of the creditbased national currencies as international reserve currencies. Finally, we drew the conclusions from the empirical study that the collapsing of the bretton woods system as result of the dollar reserve crisis could not be averted. When it comes to the stability of the dollar reserve asset in current international monetary system, we found that United States had not adapted to the sustainable condition and the stability of the dollar reserve asset could not be guaranteed. Lastly, we analyzed the measure in order to maintain the stability of the reserve.
Key Words:CreditBased National Currency; International Reserve Asset; Triffin Dilemma |
…………………………Chen Jianqi (113) |
• A General Equilibrium Model and China’s Empirical Analysis of Export Tax Rebate, Trade Surplus and Foreign Exchange Reserve |
Abstract:In this paper, a simple largecountry open economic general equilibrium model is built to study the dynamic change process of foreign exchange reserve from shortrun equilibrium of trade surplus to longrun equilibrium of trade balance, on the basis of which the effect of decreasing the export tax rebate on the longrun stock of foreign exchange reserves is quantitatively analyzed. Research finds that decreasing the export tax rebate is helpful to reduce the trade surplus and the increments of foreign exchange reserves in the short term, but the longrun effectiveness is closely related to the price elasticity of the exports. Only by decreasing the export tax rebate rate of commodity with priceelasticity can the longrun stock of foreign exchange reserves be effectively lowered compared with the time before decrease. Otherwise, it may has counterproductive results. The conclusions of the theoretical model are well supported by the empirical analysis of Chinese data. Because of the inelasticity of Chinas export products, Chinas recent export tax rebate policy reform has increased the stock of foreign exchange reserves to some extent in the long term. Hereby, some recommendations are proposed for Chinas policy choice.
Key Words: General Equilibrium Model; Export Tax Rebate; Trade Surplus; Foreign Exchange Reserve |
…………………………Tong Jinzhi, Zhao Chuan and Sun Jian (124) |
• The Investment Portfolio of China’s Foreign Reserves——An Endogenous Perspective of Foreign Reserves Flow Cycle |
Abstract:This article has established a Stackelberg and a Cournot game model, involving the central banks, financial markets of China and the U.S. as well as the real economic sector of China in order to depict a cycle of the foreign investment of Chinas foreign exchange reserves through the perspective of the essential differences of China and the U.S.. Besides, we have simulated the optimal investment portfolio of Chinas foreign reserves and its contribution to Chinas domestic economy. The results have shown that the risky assets investment of Chinas foreign exchange reserves on the U.S. assets will affect the proportion of which Chinas reserves transform indirectly into the FDI to China from the U.S.. However, the reaction of our central bank has been relatively slow. Therefore, in order to enable our central bank to gain profits, we suggest that it is necessary to bring down the CRRA coefficient of our residents, and improve our financial market development as well.
Key Words: Foreign Reserves; Portfolio; Stackelberg Model; Cournot Model |
…………………………Liu Lanbiao and Zhang Jingjia (137) |
• A New Explanation of Industry Analyst Earnings Forecast Bias |
Abstract:In this paper, we propose a new hypothesis to explain the phenomenon of earnings forecasting bias, arguing that analysts, considered to be rational investors, are influenced by sentiment (or noise trading)when they forecast earnings. Firstly, we find that there is a systematic bias of analysts earning forecasting in Chinese capital market. Secondly, we construct a composite index of sentiment, and use it to test our hypothesis by nonparametric and parametric statistic methods. The empirical results support our hypothesis. Analyst bias is usually explained on the classical financial framework in most literatures, which assumes that the analysts are completely rational and their bias come from the interestdriven. However, we think that it is better to explain analyst bias by both sentiment and interestdriven.
Key Words: Analyst; Earning Forecast; Forecast Bias; Sentiment; Investor Sentiment; Behavioral Finance |
…………………………Wu Yanran, Pan Ke, Hu Songming and Jiang Jie (149) |
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