Abstract：In this paper, we investigate the relationship among savings rates, inflation rates and money policy parameters through an overlapping-generation model including a money supply reaction rule that is compatible with China‘s transitional reforming period. We find that different combinations of savings rate and reaction elasticity of monetary supply have different effects on macroeconomic stability. Accordingly, we obtain a “list” of the optimal parameters of monetary supply rules. From the perspective of macroeconomic stability, we conclude that China can enhance its macroeconomic stability by indirectly raising the representative agents-discount rate and fine-tuning monetary policy parameters.
Key Words：High Saving Rate; Optimal Money Supply Rule; Overlapping-generation Model

Abstract：This paper develops a no-parameter framework to measure the contribution of TFP growth to economic growth, and applies it to empirical estimation in China by using province level data from 1978 to 2010. During this period, the contribution share of TFP, labor and capital to economic growth was about 109, 3.7 and 85.4 percent respectively; while not considering the influence of international financial crisis, those contribution shares were about 20.7, 3.3 and 76.0 percent respectively. From perspective of source of economic growth, the contribution share of labor was less than 8% in most years. The contribution share of TFP rose in a very fluctuating way before 1990s, reaching more than 50 percent in 1992, and then declined to less than 10 percent after 2005. The contribution share of capital declined in a fluctuating way before 1990s, then gradually rose from 1992 and reached more than 90 percent after 2005. Besides, the contribution of TFP in Eastern region was much higher than that in Northeast, Central and Western regions. Though in recent years, economic growth rates of Northeast, Central and Western regions are higher than Eastern region, due to the rapid growth contribution of factors to the economic growth rather than TFP.
Key Words：Contribution of TFP to Economic Growth; Share of Contribution of TFP to Economic Growth; Output Inefficiency; Efficient Output; Data Envelope Analysis

Abstract：IMF proposes the policy framework of capital control under the ground of abnormal international capital flow waves, indicating the important changes of its attitudes towards capital control. The paper investigates the effectiveness of capital control on international capital flows through the view of size, volatility and extreme states. The paper uses the gross international capital flow data rather than the net flow data to study the effect of capital control policy theoretically and empirically, since the net flow data would offset the volatility of international capital flows. The paper finds that the effect of capital controls is limited when the stochastic output shocks-volatility is increasing with capital control.
Key Words：Capital Control; International Capital Flows; Output Shocks

Abstract：This paper emphasizes that infrastructure of broadband occupies strategic position in economic development. Putting China’s telecommunication market as background, the paper sets up a theoretical model to deepen the research on investment mode of ICT infrastructure, gives an answer to the question whether market players should completely undertake the investment on ICT infrastructure, and represent the optimal policy instrument of government. This research points out the mode in which ICT infrastructure totally undertook by market agents cannot reach optimal allocation, but can only realize second best level. The existence of infrastructure externalities lead to differences between private benefits and social benefits, which call for the government intervention. If government relies solely on income tax, it is hard to reach the optimal level. Only through optimal subsidy can government correct the distortions to restore incentives on infrastructure investment, and finally get the most efficient social allocation. Furthermore, the paper exploits the theoretical model to analyze problems in China‘s broadband development process, and points out that the future critical direction of reform on telecommunication investment institution is to bring broadband into national infrastructure management system and increase investment subsidy on broadband.
Key Words：ICT Infrastructure; Investment; Subsidy; Broadband

Abstract：There are serious population structure problems in China like pretty low fertility rate, unbalanced sex ratio and aging. But the current fertility policy is only aimed at supply control, ignoring demand side of fertility. This paper studies fertility demand of household by examining effect of childrearing on female wage rate. We estimate different effects of different types of mothers using nonlinear transformation and mixture density model. We find that childrearing has 18% significantly negative effect on mothers-wage rate in the year when women just give a birth. Exogenous type mothers has larger such effect, which would obviously affect fertility demand of female.
Key Words：Wage Rate;  Mommy Trap; Unobserved Types; Mixture Density Estimation

Abstract：Based on the Theil inequality index, this paper derives the urbanization-inequality relationship, which is found to display an inverted U-pattern. Empirical results from China indicate that (a) urbanization led to worsening of inequality in the earlier period of 1978—1994 but has been helping improve income distribution since 1996. (b) the benign effect of urbanization was largely due to the fact that it helps narrow down the urban-rural gap, particularly since 2003; (c) to ensure a win-win scenario of growth with equity against the background of fast urbanization, policy measures must be instituted to control the rising inequality within urban areas.
Key Words：Urbanization; Inequality; Theil Index; China

Abstract：In this paper, we study the effect of labor market‘s distortion on structural change and productivity by introducing the distortion in standard closed two-sector model with Stone-Gary utility function and evaluate the performance based on Chinese macroeconomic data during 1980—2009. First of all, our research shows that labor market’s distortion has been existed in past three decades and doesn’t tend to dismiss over time. The distortion index is 0.24 after controlling the difference between sectors which implies the wage in agriculture is only 24% of non-agriculture sector; secondly, we find the distortion has hindered the structural change of China and agricultural labor will fall 26.38% if the distortion is eliminated. Finally, the distortion has made 16.34% potential productivity losses annually and output per worker will increase 19.53% if we remove the distortion.
Key Words：Distortion; Structural Change; Labor‘s Productivity

Abstract：Third party punishment is regarded as an essential to the maintenance of social norms. We examine the economic logic underlying third party punishment in a Dictator Game within a real effort context in which dictator allocates the outputs of both first party and second party. The question is whether the demand of third party punishment obeys the Law of Demand. We varied the price of punishment faced by the third parties after the dictators made their allocation decisions in a series of experiments. The results show that the third parties are willing to use the costly punishment opportunities. Besides, the level of punishment, on the one hand, is significantly negatively related to the level of price, suggesting punishment is an ordinary good, and on the other hand, is also determined by the extent to which the dictator’s distribution of outputs to himself/herself exceeds his/her own output. We further confirm the generality of such relationships by inducing believes of the second parties on whether the third party would punish dictators in a given price level or not. These results show that, there are two kinds of forces underlying third party punishment, namely, economic force and non-economic force. We should consider them both when we construct the behavioral models of punishment decision.
Key Words：Third Party Punishment; Law of Demand; Self-regarding Preference; Other-regarding Preference; Real Effort Experiment

Abstract：Utilizing a natural experiment, this paper investigates how the reform of the banking system affects industry restructuring. We find that marketization of banking system promotes the adjustment of firm‘s restructuring and growth of firm-level TFP. However, the impact of bank reform depends on firm’s profitability. It promotes the restructuring of firms with strong profitability, while hindering the improvement of TFP of firms with weak profitability. Thus, changes of financial institutions stimulate restructuring of industry. In the process of creative destruction, rate of output creation is much more than rate of output destruction, and the efficiency of resource allocation across firms is improved. Through these channels, marketization of banking system facilitates the growth of industrial output and TFP. These findings suggest that, in the case of China‘s industrial sector is facing overcapacity and decline in the potential growth rate, further promoting market-oriented reforms of the banking sector is of great significance for the structural adjustment, growth and TFP improvement of industry.
Key Words：Change of Banking System; Allocation of Credit; Industrial Restructuring

Abstract：The desire to gamble is deep-rooted in Chinese psyche, and whether the lottery preference is reflected on the stock market is the topic of this paper. Subject to the availability of survey data and transaction data, we use low price、high historical return and high turnover rate to identify the attributes of lottery-like stock, and check the rationality of the grouping index based on the low price、high idiosyncratic skewness and high idiosyncratic volatility adapted by Kumar(2009). There exists obvious lottery preference on Chinese stock market, but no lottery preference industry concentration and individual stock being consistently classified into lotterylike group phenomenon. Lottery preference cannot be explained by firm characteristics, while in accordance with gambling, macro-economic condition indeed affects lottery-like stock preference. At the meanwhile, due to the excessive chase for lottery-like stock by investors with lottery preference, lottery-like stocks earn at least 5% return rate lower than other stocks.
Key Words：Lottery Preference; Idiosyncratic Skewness; Macro Factor

Abstract：The terminology “Bürger” in the original German works of Marx and Engels only contains one meaning, but is widely mistranslated as bourgeoisie in Chinese translation. As the earliest scholar who defines the concept of bourgeoisie scientifically, when introducing bourgeoisie (middle class) to Germans, Marx excludes its original meaning of “civil”, while uses “Bourgeoisie” to refer to bourgeois specifically and distinguishes civil from bourgeoisie strictly in German. When writing in French and English, to comply with the language habits of other countries, they still adopt “bourgeoisie” in broader sense, using it to refer to propertied burgher, including bourgeoisie. Translation should be subject to German, the two terms “Bürger” and “Bourgeoisie” should be translated as burgher and bourgeoisie respectively so as to determine whether “bourgeoisie” in French and English is burgher or bourgeoisie. However, the Chinese translator’s practice is on the contrary. They understand “bourgeoisie” in French and English only with one sense ——— bourgeoisie, and in accordance with its corresponding relationship with Bürger, mistake that the latter one also has the meaning of bourgeoisie. This is just the origin of people‘s mistaking burgher (or bourgeois) economics for bourgeoisie.
Key Words：Citizen; Bourgeoisie; Civil Society; Classical Economics; Western Economics