Band 11, Heft 3

Under the new development pattern, this paper explores the characteristic tendencies and intergenerational changes of consumption structure upgrade (CSU) as well as the theoretical logic and empirical paradigm affecting the domestic value chain circulation. This paper constructs a region-industry decomposition framework for domestic value chain circulation based on backward demand to explore the impact of CSU on domestic value chain circulation. The results show that: first, CSU can optimize the structure of domestic value chain circulation and strengthen inter-regional value chain linkage; second, CSU promotes domestic value chain circulation through innovation drive, resource optimization and industrial coupling; finally, the domestic value chain circulation effect caused by CSU may be constrained by market segmentation, and accelerating regional economic integration across a country can help build up the main position of domestic value chain.

To deleverage is one of the major tasks for the supply-side structural reform in China, and to steadily deleverage in order is the key to fending off and defusing financial risks. This paper uses the economic statistics of China around 2016 to depict the “expansion–contraction” fluctuations with Chinese macroeconomy during the deleveraging. In this realistic context, it constructs a financial business cycle model based on the financial accelerator theory and attempts to use default cost changes to introduce financial shocks and understand China’s macroeconomic fluctuations in the deleveraging context in the perspective of unanticipated and anticipated shocks. Results of the numerical model simulation show that before and after the deleveraging, the fluctuations of credit, leverage ratio, credit spread and other major macroeconomic variables originate not only from the changes with unanticipated default cost. Anticipated changes with default cost can similarly explain the “expansion–contraction” macroeconomic fluctuations in recent years and offer a new perspective into the fluctuations during deleveraging. Accordingly, government, when practicing deleveraging policies, is advised to take into full consideration not only the actual changes with default cost, but also anticipated factors of financial institutions.

All governments face increasingly frequent issues arising from aggregate supply and demand against currency circulation and financial stability, and public finance and banking authorities employ a variety of policy instruments to keep the economy stable and coordinated. How to avoid policy conflicts and maximize effectiveness in policy portfolio of local government borrowing, which is taken as a major macro-control instrument, is a subject that needs in-depth study. This paper probes into local government borrowing’s monetary effect and transmission mechanism and its best synergistic model with monetary policy by the construction of a NK-DSGE model covering financial frictions, multi-period bonds and borrowing rules. The findings are as follows. (1) The shocks of one-percent local government borrowing (bond duration=5 years) push up the money multiplier by 0.39% to produce expansionary monetary effect, and the longer the bond duration, the greater the effect. (2) In the context of physical and financial shocks, monetary policy adopts a moderately tight reverse synergy with local government borrowing, effectively restraining its expansionary monetary effect for better economic stability and recovery. (3) For bonds with longer maturities, raising the risk sensitivity of local government borrowing rules benefits the improvement of welfare.

Theoretically, along with the technology progress and infrastructure improvement, geographical distance should have a diminishing effect on international trade over time. However, the empirical studies failed to deliver consistent empirical support for it. This result is known as “distance puzzle”. In this paper, we propose that the intermediate goods across borders caused by global value chain (GVC) could be an important explanation for the “distance puzzle”. We firstly build a Ricardian model with two stages of production, by which the trade elasticity under the framework of traditional trade and GVC trade are derived and compared, to theoretically explain why the GVC will result in the “distance puzzle”. Then we empirically investigate the effect of distance and cross-border times on bilateral gross trade and value-added trade over time. After controlling the influence of the GVC, we observe a diminishing elasticity of distance over time, and prove that the GVC can explain the “distance puzzle”. The further heterogeneous analysis and robustness tests confirm our empirical results.

Based on the matched data of China’s tax survey and customs from 2007 to 2011, this paper studies the differential impact of exchange rate changes on the performance of companies by region from the perspective of factor market distortion. The results show that for import companies, the RMB appreciation significantly contributes to improving their performance and this phenomenon is more pronounced in areas with high factor market distortions. Channel tests show that the proportion of intermediate goods imported by final producers increases with regional factor market distortions. Therefore, the appreciation of the national currency is more favorable for areas with high factor market distortions (companies with high proportion of imported intermediate goods). In addition, the appreciation of the national currency will promote the production of China’s upstream intermediate goods producers by expanding the output of downstream enterprises. This paper complements previous studies on the differential impact of RMB exchange rate changes on regional economic growth from a micro perspective.

Since 2014, PPP policy has been promoted rapidly in China. Based on the theory of policy innovation diffusion, this paper explores the formation mechanism of PPP spatial disequilibrium at the micro level using Chinese municipal-level panel data from 2014 to 2019. According to the research, the innovation diffusion of China’s PPP policy at the local-government level exhibits R-shaped non-progressive characteristics and is influenced by both internal and external factors. On the internal side, the debt pressure of local governments is an important determinant with an inverted U-shaped influence on PPP policy. On the external side, imitation and competition among neighboring local governments are the main external determinants. This spatial strategic interaction occurs not only in same-province regions with close proximity and similar economic development but also in different-province regions with close proximity. The above studies of er certain insights into optimizing the spatial distribution pattern of PPP and guarding against fiscal risks.