Abstract：This article explores the realization mechanism for the final and interim targets of China’s monetary policy from 2001 to 2010. It finds that the three significant price surges in the ten years were not the results of loose monetary policy. While keeping the rapid economic growth, China avoided the inflation linked with excess money issuance. The introduction of loan increment in the interim targets also showed the maturing of China’s monetary policy target system. To improve China’s monetary operation, three measures need to be taken: firstly, basing stabilizing monetary policy on the trend of nonfood price index in CPI; secondly, readjusting the definition of money according to the different characteristics of transaction money and storage money; thirdly, including RMB exchange rates into the interim targets of monetary policy.
Key Words：Monetary Policy; Target; Realization Mechanism

Abstract：Recently, inflation expectation management has become an important task for macroeconomic regulation. Using quarterly data from 2001 to 2011, our paper analyzes the effect of the information disclosure of central bank and actual intervention in managing inflation expectation under the help of structural VAR model. We find that the information disclosure has shorter timelag in managing inflation expectation compared with traditional tools of monetary policy, while the impact of interest rate tools is greater than information disclosure in the long term. We believe that central bank should use information disclosure and actual intervention synthetically to manage inflation expectation, improve the accuracy of information disclosure and set up good reputation, so as to anchor the inflation expectations in the short term and the long term.
Key Words：Inflation Expectation; Information Disclosure; Actual Intervention; SVAR Model

Abstract：This paper extracts seven common factors from Chinese macroeconomic information set, and establishes a factoraugmented vector autoregressive model (FAVAR) by the seven factors and monetary factor. We decompose the fluctuations in China’s CPI index into macroeconomic component that are due to macroeconomic factors and idiosyncratic shocks which come from disaggregate prices variations. Then, we conduct some typical impulse response of the CPI index to macroeconomic shocks. Our main finding is that the eight macroeconomic factors do capture important dimensions of Chinese macroeconomic movements. The analysis of macroeconomic component and its mean’s ratio to the mean of inflation rate itself provides a new sight for properties and sources of Chinese inflation in the different time periods. Typically, the ratio is 134% in the 2010—2011 period of inflation, which shows this is a serious inflation and is driven by macroeconomic factors. The effects of macroeconomic shocks imply that tightening of both monetary and demand rather than only monetary itself will effectively stabilize the inflation.
Key Words：Inflation; Macroeconomic Component; Idiosyncratic Shock; Factoraugmented Vector Autoregressive

Abstract：How to deal with relationship between the economic growth and income inequality correctly, which is one of the main challenges in China. The paper develops a dynamic relevant model which involves growth, inequality and fiscal policy theoretically, and its  results show that the income inequality decreases and the economic growth increases when the rich undertake tax and the poor get subsidies more, and also reverse. Based on China’s Provincial Data from 1998 to 2006, we analyze the theoretical conclusions. We find that, the poor undertake tax more while the rich get subsidies more in China, the income inequality increases, the wage labour of capital get stuck, the economic growth decelerate growth, also growth and inequality are negative correlation. Therefore, our policy suggestions are further optimizing the progressive system of individual income tax, increasing fiscal transfer payment to the poor, and constructing the social justice environment.
Key Words：Economic Growth; Income Inequality; Fiscal Policy

Abstract：Based on the national level panel data about 56 countries in the period of 1990 to 2007 and a World Bank survey dataset about firms financing behaviors in 1999, this paper investigates the relationship among bank concentration, corporate savings and current account imbalances with the utilization of dynamic panel models and Tobit models. The empirical results show that the more concentrated the banking sector is, the less the proportion of firms bank financing is and the more their retained earnings are. Furthermore, savings by corporate sector are significantly correlated with current account imbalances and the high savings in countries with a more concentrated banking sector lead to larger current account surplus or less current account deficits in these countries. Our results remain robust with the consideration of financial center effect and IV regressions. Differing from traditional measurement of financial development which focuses on the overall scale of financial sector, our results highlight the importance of internal structure of banking sector in the understanding of current account imbalances.
Key Words：Bank Concentration; Corporate Savings; Bank Financing; Current Account Imbalances

Abstract：Based on the perspective of financial function, the cooperation of financial architecture’s “embedded in each other” with different models, will help to improve the overall function of the financial system. Based on the support and promotion status of finance in the process of open regional economic cooperation, it is necessary to study the effects arising from the process of coordinated development and integration of different financial architecture. With the help of the model of technology evolution, we examined the effects of different financial architecture model in different stages of economic development, and on this basis, we analyzed integration effect of the marketoriented and bankbased financial architecture in the context of regional cooperation, and proved that the interpenetration and cooperation of the two kinds of financial architecture can play a positive effect on the regional economic development.
Key Words：Different Financial Architecture; PanBeibu Gulf Regional Financial Cooperation; Embedded in Each Other; Coupling

Abstract：The key of explaining the rapid rise and sharp volatility of commodity prices is to choose a more thorough and solid methodology. This paper provides an economic analysis and robustness test in whole perspective to explore commodity prices impact factors using a FactorAugmented Vector Autoregression (FAVAR) model with latent factors extracted from a broad dataset. The dataset includes 532 indicators of monthly frequency, which covers the real economy of the world, international speculative behaviors, supply and demand as well as inventory status of international commodity markets. Empirical evidence indicates that the real economy is the main driver of dynamics of commodity prices in the long run, while in the short run, international speculative power leads to the financialization of commodity futures, therefore is the leading force in determining commodity prices. The results also show that Chinese factors, such as growing demand, is indirect and not major. Therefore, the key to solving the problem is to monitor the forces of shortterm speculation in commodity futures indexbased investment.
Key Words：Commodity; Prices Volatility; Real Demand; Speculation; Dollar Index

Abstract：In view of the widespread urbanrural unequal paid and unequal employment opportunity problem faced by the rural immigrant work force, from perspectives of employment opportunities and wage gap, based on CHNS (1993—2009) data  a micro level household survey data, this paper applies quantile regression dealt with heterogeneity, and treatment effect model dealt with endogeneity to explore the effect of the household registration system evolvement on labor market segmentation, and shows that the employment discrimination of occupation against rural household has decreased, but the employment opportunity of rural labors to the stateowned sector is still significantly lower than urban labors; segmentation of household registration together with the other kinds of segmentations make urban and rural labors face with different wage decision mechanism; and the interaction of unequal employment opportunities with unequal paid makes the effect of Hukou segmentation on wage deceptive and partially hide in the forms of sector difference and occupation difference; Quantile decomposition found wage gap between urban and rural not effectively relieved while increased, and its root lies in the Hukou wage discrimination. Therefore, cutting the channel of Hukou interacting with the access of sector and occupation, narrowing the education gap between the urban and the rural, is the key point to eliminate the unequal employment opportunities and promote equal employment and equal paid between the urban and the rural
Key Words：Hukou Segmentation Effect; Labor Market Segmentation; Employment Opportunities Difference;Wage Gap

Abstract：This paper empirically explores excess executive compensation from the perspective of cronyism of board culture based on Chinas listed firms. After controlling for the potentially influential institutional characteristics of excess executive compensation, we show that cronyism of board culture would lead to excess executive compensation and to compensate the directors (chairman) through shareholders instead of the listed firms will help to break cronyism and refrain excess executive compensation. This paper therefore provides evidence that besides the institutional characteristics at firm level (such as the ratio of independent directors, board size and CEO duality), culture characteristics of the board will also affect the effectiveness of board supervision by using excess executive compensations as an example. The policy implication of this paper in corporate governance practice is that Chinas listed firms should design the feasible mechanisms to break the cronyism in board culture and build the healthy board culture.
Key Words：Excess Director Compensation; Board Culture; Cronyism; Corporate Governance

Abstract：Using the sample of stateowned listed firms in manufacturing industry from 2003 to 2010, this study examines the different encouraging effect of pay dispersion on top management and employee. Our results indicate that pay dispersion is positively related to firm performance and performance from operation. Further analysis suggests the higher pay dispersion, the less efficient corporate investment. Moreover, managerial power is positively associated with pay dispersion. Taken together, pay dispersion doesnt motivate top management in SOEs and is the result of managerial power. Pay dispersion is positively linked to firm total factor productivity, and the relation only exists in the subsample of low pay dispersion. Generally speaking, we provide the evidence that pay dispersion is more likely to encourage employee in SOEs when pay dispersion is low, but the relation doesnt exist when pay dispersion is high. When pay dispersion is determined by managerial power to certain extent, it seldom encourages top management.
Key Words：Pay Dispersion; Managerial Power; Firm Performance; Investment Efficiency; Total Factor Productivity

Abstract：Based on a survey of 1,268 Chinese private firms, this paper studies the effects of corporate governance on labor welfare. I construct a governance index using the incidence of sixteen structures that discipline managers. Labor welfare is measured by a number of indicators including hourly wage, pension coverage, insurance, severance benefits and average tenure. Regressions carried out on a rich set of specifications show that firms with a higher level of corporate governance not only have higher profitability but also provide better labor welfare. More findings suggest that, pursuing private benefits, managers tend to cut training expenses and various payments on labors, which hurts firm performance; whereas sound corporate governance reduces managerial discretion, adjusting their decisions on labor welfare in line with the interests of shareholders.
Key Words：Corporate Governance; Labor Welfare; Firm Performance