Abstract：This paper firstly builds a model to explain developing countries‘ economic growth and national saving by extending the dual economy model by Lewis in 1954. The paper points out the main reason for China’s saving expansion is the corporate saving expansion, and the corporate saving expansion is radically the result of dual economic structure China stays in. The paper also uses the model to stimulate China’s saving rate from 1978 to 2008.
Key Words：Dual Economy; National Saving; Corporate Saving

Abstract：This paper undertakes growth accounting of China from 1981—2010 based on index number theory and parametric estimation approaches under open circumstances. The results indicate that although China has enjoyed remarkably high income growth, TFP has been slowing down and the growth in income depends heavily on capital accumulation in recent years. The deteriorating terms of trade have been playing a significant negative role in income growth. This paper also studies the impact of TFP and the changes in both domestic absorb goods prices and the terms of trade on sector output and factor impacts in China.
Key Words：National Income; Translog GDP Function; Terms of Trade; TFP

Abstract：Measurement of the welfare loss due to resources misallocation can serve as direct evidences that input  market is distorted. In this paper, welfare loss due to resources misallocation is defined as the gap of actual output and potential output under Pareto optimal allocation, namely output gap. Based on micro firm level data of Chinese manufacturing industries over the period 1998—2007, we show the existence of labor misallocation, and then calculate the welfare loss aroused by labor misallocation. Results indicate that, labor inputs are misallocated within and between two-digit industries, but this varies from industry to industry. For the whole manufacturing industry, averagely, one unit move in the correct direction for labor inputs would increase output by 12041 to 13426 Yuan per firm. During the research period, the revenue of marginal product of labor grows faster than that of wage rates, which means the distorted labor allocation is getting worse. The results have profound implications on the optimization of resources between and within industries, and on the construction of free resource market.
Key Words：Manufacturing Industry; Resources Misallocation; Output Gap; Welfare Measurement

Abstract：This study investigates the impacts of exchange rate movements on net employment in Chinese industrial sectors. The pass-through effects of exchange rate movements on job market are analyzed and its determinants are explored through a simple theoretical framework. The dynamic real exchange rate change effects on net employment in different industries are also evaluated empirically using 4-digit industry panel dataset and industry specific real exchange rate of Renminbi(RMB). This study yields three main results:First, real exchange rate appreciation of RMB can have important negative effects on net employment of industrial sectors through both import competition and export revenue channels. A 10% appreciation of RMB real exchange rate can cause net employment of Chinese industrial sectors to drop about 2.6% to 3.9% after controlling for other variables; Second, the market competitive structure of industrial sectors is systematically related to the real exchange rate change effects on job market, the magnitude of exchange rate change effects on net employment will decrease with the increase of profit margins of industrial sectors; Third, the job market of state enterprises is also very responsive to real exchange rate change and the impact of RMB real exchange rate change on net employment is more substantial for state enterprises than private enterprises.
Key Words：Real Effective Exchange Rate; Import Penetration; Elasticity of Employment; Market Structure; Labor Intensity Ownership Structure

Abstract：Commodity Storage is key point of view to analyze the effects of monetary policy on price dynamics. The theory of Storage will be adopted to reconstruct Frankel‘s Overshooting Model, which is basic analysis framework of effects of monetary policy on commodity price. Theoretical analysis finds that, (1) direct effect of monetary policy adjusts market interest, and indirect effects on convenience yields and marginal risk aversion cost, both effects push the supply curve of storage, make market equilibrium moving, and finally have influence on the expectation of commodity price change; (2) commodity price goes up and overshoots under excess liquidity, whereas commodity price goes down and undershoots for convenience yield under tighten liquidity; and monetary policy impresses asymmetric influences on price dynamics of commodity. Empirical framework based on future market will be constructed by incorporating risk premium theory into the model of storage, and empirical study from SHFE finds that theoretical results are supported perfectly.
Key Words：Monetary Policy; Storage; Commodity Price; Dynamics Evolution

Abstract：Using the recently developed technique of a nonlinear Granger causality test by Diks & Panchenko (2006), this paper investigates the nonlinear transmission mechanism between the producer and the consumer prices in China and other countries, and then explores the evolutional trace of nonlinear transmission mechanism based on nonlinear dynamic analysis. Our results indicate that for the countries such as China there is a nonlinear causal relation from PPI to CPI, implying price increases at the early stages of production will lead to increase in consumer prices at the late stage and boost costpush inflationary pressure. Our evidence based on nonlinear dynamic analysis indicates that reversed price transmission from the prices in the late stage to the prices in the early stage is more and more obvious, and this will increase difficulty of macro-control and uncertainty in the economy’s growth in China. This study also points out that since the transmission mechanism between CPI and PPI is not static, it is more important to adopt macro-control policies based on the dynamic transmission mechanism. At last, we further point out that conclusions from traditional studies may be biased since they do not take account of the nonlinear characters of price transmission mechanism.
Key Words：Price Transmission Mechanism; Nonlinear Granger Causality Test; Nonlinear Dynamic Analysis

Abstract：When the economy has large fluctuations, the government will use fiscal policy to stabilize it, it is just the case in China. By introducing a fiscal policy rule targeting output and inflation into a DSGE model with price rigidity, this paper analyzes the effect of fiscal policy on private consumption. The results suggest that under a feedback rule, fiscal policy can affect consumption through two channels: wealth effect and expectation effect. The magnitude of expectation effect depends on the response of fiscal policy to output and inflation. Specifically, expectation effect becomes significant when the response is large enough but not too large. With the guidance of above theoretical results, we also analyze the effects of government spending empirically. Based on the quarterly data during 1996Q1 and 2011Q4, we find that the fiscal policy rule can be uncovered from the data and the government spending has positive effect on private consumption while the expectation effect plays an important role.
Key Words：Fiscal Policy Rule；Expectation；Private Consumption

Abstract：After the tax-sharing reform in 1994, central government adopted grabbing and helping hands to realize macroeconomic stability and sustaining growth. Based on new tax centralization hypothesis and flypaper hypothesis, this paper proposes four hypotheses related to two hands to explain the phenomenon of tax-exceeding-GDP growth. Using a provincial panel data of central government‘s real grabbing and helping hands and System GMM method and Acemoglu et al.(2003)’s method, hypotheses are confirmed. This paper draws a basic conclusion that although there are different remarks on two hands model, this model has indeed a basic positive effect on the development of industries with high tax revenues and the phenomenon of tax-exceeding-GDP growth. Specifically, we have three important findings. First, although there is negative interaction between two hands, this model has indeed positive impact on the phenomenon of tax-exceeding-GDP growth and its explanatory power is at least 52%. Second, although this model increases tax to GDP ratio in tax flow region mainly through tax administration efficiency, it indeed stimulates local governments to try their best to develop industries with higher tax revenues. Third, this model increases tax to GDP ratio in tax inflow region mainly through the development of industries with high tax revenues. Besides, policy suggestions to improve this model are proposed.
Key Words：New Tax Centralization Hypothesis; Real Grabbing Hand; Real Helping Hand; Matching Interval

Abstract：Once the role of environmental regulation can be measured, quantitative analysis of its impact on economic development will be possible. Based on the investigation of different regions in China, this paper decomposes environmental efficiency into two factors, being technical factors and environmental regulation, and obtains a preliminary quantification of environmental regulation. Then, the statistical tests of theoretical proposition are conducted, and the environmental efficiency values of different regions in China since 1992 are calculated. On this basis, it further refines the factors of environmental regulation, and uses the GMM model to analyze the various factors affecting the environmental efficiency from the perspective of regional differences. The results show that China should adopt effective measures to increase environmental regulation in the central and western China, and promote the coordinated development of economic and environmental development of the central China when it pushes forward the transfer of the advanced technology from the eastern to the central and western. It is the only way to improve China‘s environmental efficiency.
Key Words：Environmental Efficiency; Environmental Regulation; Technological Progression; Decomposition of DEA

Abstract：This paper investigates the food safety regulation in the presence of the information asymmetry. Due to the limitation of regulatory resources, the imperfect detection technology and inspector’s personal bias may give firms incentive to adopt the less costly production technology, which may have unsafe impact on consumers‘health. The result shows that an efficient way to improve food safety is to require firms disclosing information destined for social supervision. The regulator defines the kind of information that firms must disclose according to the requirement and specialty of food safety production. In doing so, the regulator establishes an information platform for the supervision of various parties in the society, including the third party, consumers and relevant inspectors. Although firms may provide false information, the introduction of various social supervision makes it more likely for the cheating firm to be detected and suffer more severe punishment from the society. This reduces firms’incentive to adopt unsafe technology. In spite of the cost increase of all firms, the credibility of the industry increases, and hence raises the consumers‘willingness to pay and the profit of the safe firms. This, in turn, gives incentive for firms to switch to safer technology. The analysis on efficiency of price intervention shows that, although a price ceiling can increase consumer surplus, it reduces the overall level of food safety and hence the social welfare.
Key Words：Food Safety; Regulation; Information Asymmetry; Information Disclosure; Liability

Abstract：In the process of R&D outsourcing, the principal pursues commercial goals, while the agent pursues academic goals, hence, the allocation of termination rights becomes important. If the academic extent of the lead compound that the agent screens is below a threshold, that is, the commercial extent of the lead compound that the agent screens is above a threshold, then the firm, which functions as a principal, will delegate the termination rights to the agent; if the academic extent of the lead compound that the agent screens is above a threshold, that is, the commercial extent of the lead compound that the agent screens is below a threshold, then the firm will retain the termination rights. As the ratio of the implementing wage to the total value of the lead compound becomes larger, the interval of the principal’s no-delegating will become narrower; when the ratio of the implementing wage to the total value of the lead compound is relatively small, the interval of the principals delegating will become wider as the ratio become larger, however, when the ratio of the implementing wage to the total value of the lead compound is relatively large, the interval of the principal’s delegating will become narrower as the ratio become larger. The principal‘s delegating is socially efficient, while the principal‘s no-delegating is not necessarily socially efficient: when the academic extent of the lead compound that the agent screens is very large, the principal’s no-delegating is not socially efficient. As for empirical analyses, the empirical evidence in reality proves some theoretical results to a great extent.
Key Words：Academic Value; Commercial Value; R&D Outsourcing; Allocation of Termination Rights