Sponsored by Institute of Economics, Chinese Academy of Social Sciences
ISSN 0577-9154 CN 11-1081/F
12 issues per year
Discipline(s): Economics & Finance; Management
Current Issue: Issue 03, 2014
Economic Research Journal is supervised by Chinese Academy of Social Sciences, and sponsored by Institute of Economics, Chinese Academy of Social Sciences. It aims to conduct researches on the new situation and new problems in China’s reform and opening up, economic development and transformation. Its scope covers all fields of China economics, including economic theory, finance, taxation, enterprise, new rural construction, marketing and accounting, etc. The journal, included in CSSCI, possesses a very high academic position in both domestic and oversea economic and management domain with which you can have a overall understanding about China’s comprehensive economics.
Zhang Ping, Zheng Hongliang, Wang Cheng
Fixed assets, wealth effect and household consumption: analysis based on China’s urban household survey data
Vol 49,No. 03
This paper studies the asset effect and wealth effect of productive fixed assets and nonproductive housing assets on household consumption based on household survey data. It further studies different effects and their mechanisms of the two kinds of assets. According to the study, housing assets have no wealth effect and faint asset effect on consumption which implies that housing assets are mainly consumer goods rather than investment goods in China. This property also holds for the households with two or more full property rights houses, and the rise in housing prices cannot stimulate China’s household consumption. In contrast, the productive fixed assets have significant asset effect and wealth effect, the latter is true especially for the households who are self-employed. The main mechanism is that productive fixed assets can demotivate household precautionary saving and ease household liquidity constrains. Therefore, directing the funds into production sectors, developing real estate finance and pushing reforms in the financial market are important means to promote household consumption.
Economic openness and the effectiveness of monetary policy: micro-foundations and empirical analysis
Vol 49,No. 03
For a long time, studies on the relationship between economic openness and the effectiveness of monetary policy not only encounter the criticism of lack of micro-foundations, but also face controversial empirical results. By constructing a New Keynesian macroeconomic model in an open economy, this article provides micro-foundations which are based on a general equilibrium framework for analyzing the dynamic relationship between economic openness and the effectiveness of monetary policy. Our simulation analysis basically shows that the effectiveness of monetary policy generally decreases with increased economic openness, while the empirical analysis based on China’s quarterly data of 1992–2012 obviously indicates that the more open the economy, the smaller the output and price effect of a given change in the central bank’s interest rate. This finding not only supports the theoretical predictions of our simulation analysis, but also proves to be robust across all the different specifications and estimation methods examined.
Vol 49,No. 03
The recent financial crisis and the resulting economic crisis highlighted the existence of certain links between the financial sector and the real economy. These events have made it clear that macroeconomic models need to allocate a non-negligible role to financial frictions and financial shocks. This paper thus attempts to develop a dynamic stochastic general equilibrium model to explore how the dynamics of real economic variables and financial variables are affected by financial shocks and discuss the importance of financial shocks. And the structure parameters of the model are estimated through Bayesian methods. The findings reveal that financial shocks, as the most important driving force for the cyclic changes in China’s economy, can offer important explanations for the growth in output, investment, debt, wages and fluctuations of employment. Despite coexistence of many other shocks, financial shocks can still manage to explain about 80% of the variances of output growth. And it is found through the impulse response analysis that a negative financial shock can produce significant drops in output, consumption, investment, and employment.
Vol 49,No. 03
Fiscal revenue and expenditure are important means of macro regulation. Therefore, fluctuation in fiscal revenue and fiscal expenditure and the fluctuation risks are important issues that concern government in economic regulation. Using the time series data of monthly fiscal revenue and fiscal expenditure, we built a generalized autoregressive conditional heteroscedasticity (GARCH) -in-Mean model for the growth rates and fluctuation rates of both fiscal revenue and fiscal expenditure, and tested the effect of fiscal fluctuation risks on fiscal revenue and fiscal expenditure. The results are as follows: Firstly, in respect of the relationship between growth rates, fiscal expenditure growth stimulates fiscal revenue growth, while fiscal revenue growth does not significantly stimulate fiscal expenditure growth. Secondly, fiscal fluctuation risks have an asymmetric effect on the growth rates of fiscal revenue and expenditure, namely that fiscal expenditure risk promotes the growth of fiscal revenue, while fiscal revenue risk inhibits the growth of fiscal expenditure. Lastly, the impact of random shocks on fiscal revenue and expenditure lasts for a relatively long period, which usually starts to decay after 9 months and will completely disappear after 27 to 40 months; while such impact on the fluctuation rates of fiscal revenue and fiscal expenditure lasts for a shorter period and will be fully absorbed after 4 months.
Housing institution reform, liquidity constraint, and entrepreneurial choice—A theory and the empirical analysis of China
Vol 49,No. 03
Based on a dynamic model of entrepreneurship and the Chinese urban survey data, this paper empirically analyses the effects of housing institution reform on entrepreneurship . The results show housing institution reform increases the entrepreneurship rate of workers through decreasing liquidity constrain, and possesses typical features of the presence of both short-term and long-term effects the effects of housing institution reform on the entrepreneurship choice of workers who possess significant professional skills, work in a government department, or have an intermediate professional title are higher than that of other types of family.