Abstract： Socialist political economy is a theory that aims at researching the laws of socialistic mode of production. The socialist cause with Chinese characteristics is in the historical process of painstaking exploration and diligent innovation， therefore the guidance of political economy is badly demanded. The great practice of socialism with Chinese characteristics has not only raised the desperate demand for socialist political economy， but also been creating our confidence in the theory. First of all， the historical conception of socialist political economy with Chinese characteristics lies in sticking to the historical materialism principle of liberating and developing productive forces. Following that， its core proposition consists in investigating how to adhere to the orientation of the socialist market economy reform. After that， its main priority lies in analyzing how to mobilize the enthusiasm of all aspects. Last but not least， the fundamental objective in this particular historical stage consists in discussing how to avoiding falling into a “middle income trap”.
Key Words： Political Economy; Socialism with Chinese Characteristics

Abstract： With reference to general categorization of economic development stages and international experiences of agricultural development， this paper asserts that China's agricultural development has overall completed two stages that aim to solve food problem and income problem， respectively， and entered new stage aiming to build a mode of agricultural production. The paper identifies two causes that lead to no progress in accomplishing the task entrusted by the new stage of agricultural development in China. One， constrained by farm size， there appears phenomenon of diminishing return to capital in agriculture， which seemingly indicates that China's agriculture as an industry lacks the viability and competitiveness. Two， conventional wisdom that claims the exceptionality in market competition characterizing agriculture as an industry in general and the Chinese agriculture in particular， which leads China's agriculture to be over dependent on subsidies and protection. This paper tries to clarify such conventional wisdom impeding the construction of modern mode of agricultural production in theoretical perspective， to explore difficulty facing China's agriculture caused by diseconomy of scale in empirical perspective and to propose reforms of land system and household registration system in order to eliminate institutional barriers preventing size of farm land from enlarging.
Key Words： Stages of Agricultural Development; Mode of Agricultural Production; Economy of Scale; Agricultural Production Function

Abstract： Measuring economic volatility and its driving forces is crucial to macro-controls. Using the conditional Markov model， we find that great moderation and slowdown are two typical facts of macroeconomic operation under the new normal. We establish a TVP-SV-VAR model to investigate the driving forces， and find that： (1) the continuation of the great moderation is the result of changes of the impulse and propagation mechanisms of structural shocks. The volatility of supply shocks and demand shocks decline， and there is significant buffer effects for the shock transmission in economic system. Therefore， self-stabilizing effects are strengthened in the newnormal economy. (2) The slowdown is the outcome of declining potential growth rate and negative external demand shock. The down-turn of longterm economic growth since 2006 is the major factor. The accelerated reforms in 2012 has slowed down the declining rate， but not yet achieved underpinning. Continued negative cyclical components driven by demand shocks are boosting factors. Micro stimulating policy is gradually taking effects but has not yet changed the direction of shocks. To govern the economic slowdown， the government must speed up structural adjustment， technological innovation and institution reform to smooth and even reverse the downward trend of potential growth rate， and also quickly adjust the fiscal and monetary policy to hedge the negative effect of demand shocks.
Key Words： New Normal; Great Moderation; Slowdown; Structural Shocks

Abstract： This paper classes the total fixed capital over a country into three categories， namely， economic infrastructure capital， social infrastructure capital， and non-infrastructure capital， and demarcates the range of investment in each of them respectively. Then， it estimates the three categories of capital stocks in China at both national-level over 1981—2012 and provincial level over 1997—2012 according to the demarcation. With the more accurate data， this paper estimates the output elasticities of the three categories of capital and then tests whether the production function of China shows constant returns to scale or not.
Key Words： Economic Infrastructure Capital; Social Infrastructure Capital; Non-infrastructure Capital; Output Elasticity

Abstract： This paper constructs a theoretical model to analyze how integrity and public investment influence on the infrastructure quality， and then we use provincial related data and China enterprise survey data to show the macro performances and micro evidences that how integrity and public investment impact on infrastructure quality respectively. Theoretical model shows that， the lower the level of integrity， the more likely that enterprises take “shoddy” means， which results in the lower quality of infrastructure， and public investment can improve infrastructure quality when integrity level is high， while opposite when integrity is low. Empirical tests support the theoretical model. Macro results show that， the low integrity has significant negative impacts on the infrastructure quality， and public investment shows significant integrity threshold effects that when integrity level is high， its effects on road quality is not obvious， while it performances significant adverse effect when integrity level is low. The enterprise micro evidences support the above results， and it further reveals why the quality of transport infrastructure has been improving so slowly.
Key Words： Integrity; Public Investment; Infrastructure Quality

Abstract： Government is capable of monopolizing information to maximize its budget. The information asymmetry between government and the public can be alleviated by budget disclosure which elevates the ability of the public supervision. The media's information intermediary function and reputation management function play an interferential role in budget disclosure， and further enforce the effects of budget disclosure. This article chooses media coverage of central government budget disclosure as research object， and observes the “three public budget” of Chinese central government as the proxy of budget maximizing behavior to examine the effects of media coverage and mood. We find that (1) Media coverage significantly restrains the positive association between the current budget implementation efficiency and the degree of future budget growth; (2) The effects of media mood on budget behavior are different： the positive media mood can directly motivate officials to inhibit the positive association between the current budget implementation efficiency and the future budget growth rate， while the negative media mood works relying on the constrain system of government administration. Our study supplies the new empirical evidences of the effects of media on the government behavior and concludes that the media works on the condition of the incentive and constraints system of government administration under the unique China institutional background.
Key Words： Media Coverage; Media Mood; Public Opinion Environment; The Three Public Expenses Budget

Abstract： Social trust is a significant component of social capital and crucial to the economic development. Unfortunately， scholars show that social trust in China is not high enough these years. Compared with previous studies， this paper indicates the formation of social trust is likely to be related to the scarcity and competing power of common resources. Based on the CGSS survey data in 2003 and 2010， taking the mandatory education as an example， this paper explains the relationship between the formation of social trust and the common resources. We find that the improvement in the supply of common resources is an effective approach to increase social trust， especially social trust in the disadvantage groups. Allocating public resources more fairly is another effective approach.
Key Words： Common Resources; Social Trust; Mandatory Education

Abstract： The incomes of the layoffs shrink considerably due to the SOE reforms in China， thus leads to the change of family resources and exert its influences on the human capital formation of their children， which exact impacts have not been measured yet. This paper analysis this kind of impacts after ruling out the potential drawbacks of identification problems of early retire workers， workers with no pay or voluntarily leave the job by considering the criteria of job change and income shift while utilizing the data from CHNS ranging from 1989 to 2011-The results show that the layoff from SOEs' do negatively affect the years of receiving the education on their children for about-4.3%—-6.9%. The negative impacts peak for those who lose their job from SOEs' during 1993 and 2000-The negative impacts of the layoff parents' on the children's education are primarily reflected in the postpone of education phases rather than termination of it. The potential mechanism for this relatively human capital deprecation is the direct reduction of family resources planned for the children， which is exemplified by the intergenerational transmission of risk attitudes and reforms in the education systems. Discovers from here provide the evidences on family resources on children's education in China under the human capital framework initiated by Becker (1994)， which implies the assurance of family resources are key to escape the intergenerational human capital depreciation.
Key Words： SOE Reform; Layoff; Human Capital; Education

Abstract： The declining labor income share has aroused wide public concern. This study focuses on labor income share in China's industrial sector and pays particular attention to the role of Corporate risk. Based on Holmstrm & Milgrom (1987)， theoretical model illustrates that decreasing risk encourages employees to work harder， resulting in higher output and wage. Since output grows faster than wage does， labor income share decreases. Empirical analysis shows positive correlation between Corporate risk and labor income share， which is robust to alternative measurement of risk and various specifications. We also explore the mechanism and find consistent evidence： output grows faster than wage and fixed wage share drops while risk descends.
Key Words： Labor Income Share; Corporate Risk; Wage Contract; Industrial Sector

Abstract： The political uncertainty aroused by official turnovers often has a major impact on local economic development， thus affects the daily operating and investing activities of local firms. This paper investigates whether the political uncertainty increases the market risk faced by local firms and which factors can aggravate or mitigate this mechanism. Using data of listed firms in China from 1999 to 2012 as samples， we find the political uncertainty significantly increases the current year's market risk faced by local firms. Besides， the degree of political uncertainly can be significantly reduced if the new official has some connection with the provincial or local leaders， thus lower the impact on local firms. Also， the impact of political uncertainty is more pronounced when the firms are in the regions with lower degree of marketalization， and the impact of political uncertainty is not pronounced when the firms are in regulated industries and are owned by government. This paper enriches the research on corporate risk， and can help us to better understand the transmission mechanism of political uncertainty and the economic consequences it causes as well.
Key Words： Official Turnovers; Political Uncertainty; Corporate Risk

Abstract： This paper studies the influence of short-selling and margin-trading program in China on crash risk. We find that contrary to the intention of CSRC， the implementation of this program does not decrease but increase the stocks' crash risk. The reason is that the program has two unique characteristics： the criteria for eligible stocks and simultaneous short-selling and margin-trading for the same stock. The criteria for eligible stocks means the selected stocks have less crash risk ex ante， and simultaneous short-selling and margin-trading for the same stock means the investor can make short-selling and margin-trading for the eligible stocks at the same time. The asymmetry of margin-trading and short-selling exacerbates the crash risk.
Key Words： Margin Trading and Short Selling; Crash Risk; Asymmetry

Abstract： Previous researches on effect of monetary policy are based on the hypothesis of representative firms， and neglect the effect of firms' network induced by their endogenous interaction on monetary policy's consequence. This paper surveys the effect of monetary policy from firms' network perceptive using the data of guarantee circle. Results show that monetary policy exerts more influence on firms in guarantee circle， which indicates that endogenous interaction can enlarge the effect of monetary policy on the real economy. The enlargement effect of endogenous interaction is pronounced in networks with highly risky firms. When firms are located in more important nodes， their investment will be more affected by monetary policy. And the amplification effect of guarantee circle comes from timevarying contagion effect and cyclical firm leverage. Our results indicate that in the process of monetary policy transmission， endogenous interaction of firms plays an important part. Monetary policy practice should consider the endogenous interaction among firms to avoid the policy misuse.
Key Words： Endogenous Interaction; Monetary Policy; Guarantee Circle

Abstract： With Chinese export data at firm level， we analyze the effect and channels of internet on international trade， measuring internet by bilateral and bidirectional hyperlinks. In theory， internet will decrease fixed and variable trade cost to increase trade volume. We arrived at the following conclusions through empirical test： internet can increase export volume; this effect is stronger for normal trade， differentiated goods， domestic firms and more productive firms; internet can increase the possibility and persistence of firm's export; internet can increase trade volume mainly through intensive margin and quantity. The above conclusions are still robust after considering zero trade， alternative measurement， multiproduct firms and the endogeneity of internet.
Key Words： Internet; International Trade; Hyperlinks; Trade Margins