Abstract：Various measures of degrees of fiscal decentralization have been extensively used in applied and empirical studies. This paper is a first attempt to develop a theoretical framework to systematically study the problem of measuring degrees of fiscal decentralization in a fiscal system. We first present an axiomatic derivation of a class of measures that combine expenditures, revenues and local autonomy for measuring degrees of fiscal decentralization. We then use the experience of the Chinese fiscal decentralization from 1985 to 2007 to illustrate our measures. Our illustration shows the importance of selecting a measure in empirical studies of the effects of the Chinese fiscal decentralization on economic activities.
Key Words：Fiscal Decentralization Index; Expenditure; Revenue; Local Autonomy; Chinese Fiscal Decentralization

Abstract：This paper mainly analyzes the governance of local officials under Chinese style decentralization. We make a breakthrough in modeling Zhou’s ideas by introducing the Contest Success Functions, and develop a generalized analytical framework which avoids the limitation of Zhou’s mathematical method. Our framework can effectively deal with Tao et al.’s query about the role of political network. Our studies focus mainly on the benchmark case and the extended case, and put forward four propositions in each case, respectively. Furthermore, we point out how the central government chooses the optimal incentive strengths for economic development and other comparable jurisdictions, respectively.
Key Words：Chinese Style Decentralization; Local Government; Governance of Local Officials

Abstract：On the process of primary and secondary national income distribution, it exists before-tax and after-tax functional income distribution. The beforetax functional income distribution dominated by market reflects the principle of efficiency, and the after-tax functional income distribution dominated by government reflects the principle of fairness. It is very important to scientific and accurate estimate China’s functional income distribution for studying many macroeconomic issues. This paper presents particular method to estimate functional income distribution, and uses the latest estimates of “Flow of Funds Accounts” from 1978 to 2008 and the relevant data for empirical research. The results show that: Since 1983, China’s before-tax and after-tax labor share shows long-term downward trend; From 1983 to tax sharing system reform in 1994, China’s before-tax and after-tax capital share shows long-term upward trend, and remains stable growth after 1994; The after-tax factor share is always below the before-tax factor share.
Key Words：Flow of Funds Accounts; Functional Income First Distribution；Tax Sharing System

Abstract：In the article, an empirical test is conducted on the relation between saving rate, GDP per capita, and MPK, which is based on the Function of Household Production and the model of the endogenous determination of time preference, both offered by Gary S. Becker. And the following application shows that the sharp difference of the savings rate between China and the United States can be explained in framework, which lays no emphasis on the preference difference.
Key Words：Endogenous Time Preference; Household Production Function; Savings Rate

Abstract：In the period of monetary tightening, the key in using the tool of Reserve Requirement Ratios is to grasp a proper scale so as to reduce the risk of overshooting. Hence, it is essential to study the ceiling of Reserve Requirement Ratios. On the basis of Circular Flow of Income Model of national economy, this paper analyses the solutions of the withdraw and monetary control in monetary economy, which lay the foundation for this paper’s theoretical framework, where Reserve Requirement Ratios is used as the uniform measure of the space for monetary policy. This theoretical framework gets a formula to calculate the theoretical ceiling of Reserve Requirement Ratios. The formula takes macroeconomic controls into consideration and can be used to measure the space for monetary policy. The ceilings of Reserve Requirement Ratios since 1993 are clear according to this formula. Empirical research on the ceilings, combining the study on the monetary policy efforts, is followed. The conclusion suggests that the theoretical ceiling of Reserve Requirement Ratios does exist; using Phillips Curves in analysis, however, we get that the ceiling changes with different economic conditions and with changes in different economic factors. From the Granger Test of Causality between the theoretical ceiling of Reserve Requirement Ratios and the monetary policy efforts, we can see that the theoretical ceiling of Reserve Requirement Ratios can serve as a numerical basis for currency authorities in macroeconomic controls to control the directions and efforts of policies, thus can reduce the risks of overshooting and hard landing.
Key Words：Reserve Requirement Ratios; Circular Flow of Income Model of National Economy; Withdraw; Monetary Policy Efforts

Abstract:This paper studies the financial accelerator effects and its mechanism under the conditions of sticky prices, sticky information and hybrid sticky with the use of DNK-DSGE model in open economy. The results show that the financial accelerator effect is significant in China, the magnitude of the effects is different under different conditions of stickiness, which is the largest under the condition of sticky information; There are significant differences among the effects of the economic shocks after taking financial accelerator into accounts. Also there are significant differences among amplification effects on economic shocks because of the financial accelerator. The features of financial accelerator are different under different stickiness conditions. The propagation mechanism and persistence of economic shocks are different under different stickiness conditions, the paths of impulse responses under Hybrid Sticky condition are more line with the real world, whose shocks are more persistent.
Key Words:DSGE Model; Sticky Price; Sticky Information; Hybrid Sticky; Financial Accelerator

Abstract：This paper examines the dynamic convergence between Chinese and six major developed stock markets using rolling cointegration. We find that the international integration for China’s stock market has loomed with uncertainty and asymmetry. Granger causalities of Cointegration between China and developed markets have basically formed, however their synchronous relationships have existed in periodic components.The international integration has improved significantly after China entering WTO, but does not go on during the current financial crisis originating from the Unite States and Europe. To further promote the financial integration process, China should adjust strategies to ensure sharing the interests of globalization at the lowest cost based on her own market natures and the international financial situation.
Key Words：Accession to the WTO; China Stock Market; Dynamic Internatioal Integration

Abstract：Based on the data of households’ financial assets in the cities of China in 2007 and 2012 collected by Beijing Ordo Consultant Center, this paper surveys the Chinese urban residents’ attitude to the stock market, their participant behaviors and the various influencing factors behind them. It finds that savings take a lion’s share in Chinese households’ financial assets and the household income has polarized. The empirical results reveal that age, income and educational background have significantly positive effect on residents’ equity investment participation; risk attitudes, social interaction, real estate proportion and career risk are important factors influencing the participation. Moreover, credit constraint and social interaction impact the extend of residents’ participation significantly. Compared with that of 2007, both Chinese household asset and income increased obviously in 2012, and the income polarization has intensified, but the degree of equity investment has decreased. Except for age, education and income, the influencing factors on the participant behaviors are dynamically changeable, viz. Chinese residents’ attitude to stock market and their participation vary as the environment of financial markets changes.
Key Words：Stock Market Participation； Participation Rate

Abstract：The “RMB undervaluation puzzle” refers to two related facts: 1) that the RMB real exchange rate has been depreciating along with China’s strong economic growth; 2) that most Western researchers agree that the RMB is seriously undervalued in recent years. We propose that this puzzle is mainly caused by an interregional race to the bottom in China, which reduces average input usage and labor cost, thus seriously depressing the general price and wage level through three types of “price multiplier effects”. We extend the standard input-output model to simulate the price-level effect of racing to the bottom in two key sectors (road transportation and coal mining), using actual inputoutput data. The results show that, quantitatively, our model can fully explain the “RMB undervaluation puzzle”. The implication is that in order for the RMB real exchange rate to reach and remain at a proper level, inter-regional race to the bottom in China must be effectively tackled, which entails a radical overhaul of China’s economic system and the transition of its development model.
Key Words：RMB Real Exchange Rate； Race to the Bottom; Input-output Model

Abstract：By establishing an economic model and recursive simulation, this paper analyses how different distribution rules can influence economic performance under the total quantity control. The results show that tilting emission permits distribution policy towards the region whose enterprise has technical advantages will help to improve the enterprises’ total profit, but will widen regional gap, otherwise, it will promote consumer welfare level, increase total tax revenue and narrow the gap between the regions, but the enterprises’ total profit will decline. Therefore, to solve the dilemma, the central government needs to balance the overall efficiency and interregional fairness. Further study shows that the central government transfer payment to the region lagging behind in technology can solve the fairness problem.
Key Words：Total Quantity Control; Interregional Allocation of Emission Permits; Economic Performance

Abstract：The analyses presented in this article are based on our newly developed model for projecting the home-based care needs and costs for elderly and the recent survey data. The results show that in the first half of this century, the numbers of ability of daily living (ADL) disabled elderly will increase more rapidly than that of the total elders; disabled oldest-old will increase much faster than that of young-old; disabled elderly without children will increase more rapidly than those living with children; and the annual growth rate of the percent of GDP devoted to home-based care costs for disabled elders rises substantially faster than that of the annual growth rate of the total number of disabled elderly persons. Based on the policy scenarios, our comparative analysis show that, under the scenario of retaining current mainly-one-child fertility policy unchanged, the average burden of home-based care costs for disabled elders per labor (persons aged 18—64) in 2030 would be at least 3-0—4-1 times as large as that in 2000, and the 2050 average burden per labor would be at least 6-8—12-6 times as large as that in 2000, much higher than that under the two-child with late childbearing policy scenario. Thus, we propose China to start the soft-landing of the two-child with late childbearing policy as soon as possible. We also discuss the effects of possible changes in mortality and the trends in probabilities of the elderly ADL status transitions on elderly home-based care needs and costs in the future in China.
Key Words：Elderly Ability of Daily Living; Elderly Care; Care Needs and Costs; Projections; Fertility Policy