Abstract：In this paper, we extend Hsieh & Klenow (2009)’s analysis of resource allocation efficiency by relaxing the condition of constant returns to scale. We use the dispersion of marginal revenue product of factor to measure the resource misallocation and apply it to micro data of Chinese manufacturing survey between 1998 and 2007. We use the Levinsohn-Petrin (2003) semi-parametric estimation method to get the output elasticity of the inputs in each industry and assume a standard model of monopolistic competition with heterogeneous products. We find: (1) Chinese manufacturing total factor productivity would gain an increase of 57% in 1998 and 30% in 2007 if both capital and labor are effectively reallocated; and (2) From 1998 to 2007, the improvement of capital allocation efficiency increased the aggregate total factor productivity by nearly 10.1%, while the improvement of labor allocation efficiency increased the aggregate total factor productivity by approximately 7.3%. Compared to the method proposed by Hsieh & Klenow (2009), our method is more precise in measuring the efficiency of resource allocation and is able to distinguish the effects from each factor. Our empirical result shows that resource misallocation in China is much less than Hsieh & Klenow calculated.
Key Words：Resource Allocation Efficiency; Total Factor Productivity; Monopolistic Competition; Returns to Scale

Abstract：Using China’s manufacturing firm-level micro data from 1998 to 2007，this paper has a systematic empirical study on the characteristics of firm entry-exit and its relationship with TFP dynamic evolution. Results find that：Firm entry and exit rate in China’s manufacturing seem quite high，and they decline with firm size. The new entering firms are main composition sources of each year enterprises in the sample，but the duration of new entering firms is quite short，meanwhile the size of entering firm and exiting firm is relatively small. In the sorting of average productivity，entering firm is higher than exiting firm，but both are lower than surviving firm. At the same time，the survival probability of new entering firms do decline as the entering years grow，and the higher initial TFP of the firm，the lower rate for it to exit subsequently. The empirical results also show that：There exists significant market selection effect which forces the less efficient firms to exit，after entering into the market，new firms achieve a rapid productivity growth through learning effect，while the exiting firm faces significant “shadow of death” effect. Finally，Firm turnover has an important direct influence on manufacturing TFP growth，moreover，
it also has a significant indirect role in promoting surviving firms’ TFP growth though the market competition effect. This paper helps to properly understand the power source of China’s manufacturing TFP growth on the firm level.
Key Words：Manufacturing Firms；Firm Entry and Exit；TFP

Abstract：The paper proposes a theory model and assumption of the effect about product substitutability on industry productivity dispersion on demand-side conditions. The paper uses Chinese manufacture firm-level panel data to calculate industries productivity dispersion to test the link between product substitutability and productivity dispersion. The result illustrates intra-industry product substitutability exerts an appreciable impact on intra-industry resource allocation. Less substitutability can lead to productivity dispersion increasing and average industry productivity decreasing. The results are always robust when we use three different indexes respectively on product substitutability and productivity dispersion, even after adding the control variables into the model such as sunk cost, marketization level, ownership and so on.
Key Words：Infrastructure; Export Technological Sophistication; Firm Heterogeneity

Abstract：This paper studies the dynamic behavior of security prices in the presence of heterogeneous investors. We empirically examine the behavior of four different types of investors including small individual, big individual, mutual fund and other institution. We use all four different types of investors’ trade data between 2006 and 2010 in Shenzhen Stock Exchange to examine our hypothesis. The empirical evidence shows :(1)Heterogeneous investors have different behavior in Chinese Stock Market. (2) Trading between heterogeneous investors drives price formation. When small investors buy from other types of investors, the price will drop. On the contrary, the price will rise.（3）Big individual with information advantage and superior ability buys the undervalue stock from small individual who is liquidity provider with psychological bias, then sells overvalue stock back to them. This process pushes the price up or down.
Key Words：Investor Behavior; Heterogeneous Investor; Price Formation; Psychological Bias

Abstract：Enlightened by Samarakoon’s thoughts, this paper, on the analysis basis of unexpected return, by distinguishing the overlapping of trading time to set up contagion model, studies the characteristics of contagion between Shanghai stock market and the other 27 markets in the world during American financial crisis and European debt crisis. The result shows: Firstly, during American financial crisis, the contagion from Shanghai stock market to the other world’s markets enhances significantly, while, during European debt crisis, the contagion declines sharply from Shanghai stock market to European and American markets, but the stronger contagion effect still exists in the neighboring countries in this region. Secondly, during American financial crisis, the contagion in Shanghai stock market is driven by the current surrounding markets and one-period lagged American markets; during European debt crisis, the contagion from developed countries in Europe to Shanghai stock market enhanced significantly. Finally, unexpected return is considered as barometer of economy and nonlinear change of unexpected return has a predictive effect on the crises.
Key Words：Unexpected Return; Contagion; Overlapping; LSTR Model；Financial Crisis

Abstract：By building, calibrating and simulating a DSGE model based on Stockman（1981）Cash in Advance (CIA), we explain, analysis and predict the macro-economy and economic structure outcomes of interest rate liberalization in China. The model’s steady state, impulse responses and simulation results show that higher real deposit rate and capital marginal cost will suppress investment and capital stock growth, increase the consumption ratio in GDP, which improves the economic structure and promote sustainable development; increasing interest rate can offset fluctuation facing shocks; the persistence of real economy to the reaction of monetary policy enhances, which means a better interest rate channel. We won’t worry about the negative effects on investments and economy as the model shows. We should steadily promote the interest rate liberalization reform, update traditional development concepts, promote capital efficiency and consumption role in economic growth with the interest rate liberalization, strengthen the price lever in monetary policy and realize a sustainable healthy development of China’s economy.
Key Words：Interest Rate Liberalization; DSGE; Macro-economy; Economic Structure

Abstract：It is still a puzzle on the issue of the high level of China’s monetarization. In this paper，we have，from the perspective of micro demand for money, tried a reconsideration for the China’s Riddle. The results of our study demonstrate that economies of scale in money demand do not exist, that scale elasticity is significant greater than other countries, and that small firms exhibit larger scale elasticity than big firms. Cagan effect in money demand exists and demonstrates obvious asymmetry in that the stronger is Cagan effect, the higher the inflation rate is. We could conclude from above results that faultiness of financial market, system and relative low stable inflation, are the main sources of the China’s Riddle.
Key Words：Money Demand; Cagan effect; Inflation Rate

Abstract：This paper studies the effects of different levels of education on regional economic growth difference in China by applying panel data analysis. We adopt a special specification of aggregated production function embodying technological innovation and imitation, relaxing the assumption of complete substitution for different levels of human capital based on principle of the knowledge spillover. The empirical results show that education has significant effects on the regional economic growth. However, primary education contributes mainly to the final output production, while advanced education contributes to technological innovation and imitation. At the current economic structure, the primary education is economically more efficient than the advanced education. At the regional level, advanced education plays a more significant role in promoting economic growth in the central and western area than in the eastern area. Finally, we discuss some policy implications to coordinate the development of education and economy.
Key Words：Different Levels of Education; Regional Growth Difference; Technological Innovation and Imitation; Human Capital

Abstract：The LMDI method is used to decompose the carbon emissions from 1994 to 2008 in China and explore the contribution of the six major industries to it from the perspective of the industrial structure. The influence of four factors to carbon emissions, such as energy structure, energy intensity, industrial structure and total production are also studied. The conclusions are: (1) The period can be divided into five stages according to the variation properties of energy intensity and total production. (2) Industry sector made biggest contribution to the growth of carbon emissions, except the “high efficiency and low yields” stage (1995—1998). On the whole, the postal department and transportation sector made second contribution to the growth of carbon emissions, other industrial sectors made less contributions. (3) The total production and the energy structure are the first and the second factors to the growth of carbon emissions, while energy intensity and energy structure are the first and the second factors to its reduction. Therefore, this paper gave the policy proposals of the balanced development of inter-industry and intra-industry, introducing advanced technology to improve the efficiency of energy utilization, continuously developing clean energy and expanding its scope of use. Some concrete measures are provided for each stage.
Key Words：Economic Growth; Energy Consumption; Carbon Emissions; Industrial Structure

Abstract：Present literature generally adopts the duration of falling-into poverty to define chronic poverty or transient poverty. This measurement method, however, does not consider the welfare level of those poor. This paper modifies the measurement method proposed by present literature and applies it to a rural household panel data in China. We find that rural poverty from 1995 to 2005 is dominated by chronic poverty rather than transient poverty. Empirical analysis using the measured results reveals many interesting and important findings related to chronic poverty and transient poverty, which sheds light on anti-poverty policy making in China.
Key Words：Chronic Poverty; Transient Poverty; Anti-poverty Strategy

Abstract：Whether health insurance matters to health has been at the center of debates when expanding health insurance coverage in developed and developing countries. In 2007, the Urban Resident Basic Medical Insurance (URBMI) program was piloted in China. Different government subsidies across cities and groups provide an opportunity to employ the IV estimation approach to identify the causal effects of health insurance on health. Results from the URBMI survey data show that URBMI beneficiaries experience statistically better health than the uninsured. Furthermore, the insurance health benefit appears to be stronger for groups with disadvantaged education and income than for their counterparts. In addition, the insured receive more and better inpatient care, without paying more for the services.
Key Words：Medical Insurance; Health; Urban Basic Medical Insurance; Governmental Subsidy

Abstract：To investigate the difference and its reasons of corruptions between groups and individuals by exploiting the asymmetric information, I develop a model of ultimatum game with incomplete information which captures the basic features of corruptions, and I design its corresponding experiment. First, I set up a psychological game of ultimatum with incomplete information based on beliefs and the theory of inequality aversion preference, and deduce some hypotheses and predictions. Then, I conducted an experiment with undergraduated students. Finally, I test the above predictions with data of experiment. The result of the experiment shows that the proposers of group conduct more corruptions than the proposers of individuals do, however it also shows that there is no significant difference of the responders’ psychologies, beliefs and behaviors in two groups. The higher rate of corruption of group can be explained by that groups are more rational and have lower psychological cost than individuals which is consistent to predictions of the theoretic model. The result means that transparency, official rotation and severe punishment could be the good methods for preventing collective corruptions.
Key Words：Group; Individual; Corruption; Ultimatum with Incomplete Information; Experiment