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De-soft-budget-constraining, Real Estate Tax and Local Government Debt Risk Management
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TitleDe-soft-budget-constraining, Real Estate Tax and Local Government Debt Risk Management  
AuthorShi Xiaojun,Fu Li and Wang He  
OrganizationRenmin University of China;; 
Key Wordssoft budget constrains; real estate tax; local government debts; DSGE model 
AbstractThis paper is made to extend the DSGE model by including in the financial tools, monetary policies and fiscal policies. Characterizing the de-soft-budget-constraint, real estate tax, we established a general equilibrium model consisting of six departments as households, entrepreneurs, real estate producers, commercial banks, local governments and central bank. This model take both economic growth and risk control into account, and try to analysis the risk suppression effect of the “financial-fiscal-monetary” policy portfolio. The results show that: the portfolio of de-soft-budget-constraint, monetary policy and real estate tax could help government reduce welfare losses if both economic growth and risk control are the goals. The real estate tax is like a coin that has two sides, it can help governments control debt risks effectively while it may increase output fluctuations. 
Serial NumberWP1457 
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