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Government productive spending and Economic fluctuations in China
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TitleGovernment productive spending and Economic fluctuations in China  
AuthorRao xiaohui and Liu fang  
OrganizationJiangxi University of Finance and Economics;Henan University of Economics and Law; 
Key WordsGovernment productive spending; Government spending structure; Economic fluctuations. 
AbstractAnalysising Chinese government’s fiscal policy in the past years, we find that the govement productive spending such as infrastructure investment has played the key role. To investigate the relationship between government productive spending and economic fluctuations, we build a dynamic stochastic general equilibrium model based on the production function including the productive government spending and incomplete competitive markets. Our paper agrues that (1) the output share of public capital by Bayesian estimation is about 10% and government spending does cause productive externalities; (2) the shock from government productive spending is an important source of output fluctuations and it can explain about 23% output fluctuations; (3) the shock from government productive spending has the crowding-out effects on private consumption and investment in short-run , however, the crowding-in effects dominate in long-run. 
Serial NumberWP758 
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