The Structure Effect Analysis Of Production-factors Market Distortions

Factor market distortions and economic structure change are born as the two large economic phenomenons in the China’s transition. From the perspective of structuralism, the papers thinks that factor market distortions lead to the change of economic structure, and the change of economic structure is a important factor to promote economic growth, which contains the mechanism of" factor distortion, structure adjustment, optimize the allocation of resources and economic growth". On the basis of carding system the traditional factor distortion theory and the structural developing theory, combins with the China stage features of development since the reform and opening up, absorbs the latest achievements in modern economics theory and empirical research, integrates and enhances more roundly and systematically factor market distortions and optimization of economic structure theory system, efforts to build effective inherent mechanism analytical framework to explain that the distortion structural effects of the economy. Then uses this framework, analyzes the causal relationship between the structural problems of the current production factor market distortions and economic operation in China, and the effect resulting in loss of efficiency, investigates and verificates system through empirical research methods. Further study the economic development constraints in the structural transformation process, center features and the relationship between economic growth modes. Forming a growth path of structuralism, the paper comes to the final conclusion and enlightenment. Specific studies include:Firstly, the literatures review. First of all, clarifies the relevant the concepts of factor market distortions, and redefines several important concepts, such as factor market distortions, factor price distortions, fator misallocation marketization degree of production factor. Then, classifies orderly the measurement method of factor market distortions, and divides into three categories, which named as partial equilibrium, general equilibrium method, factor market distortions index, and discusses the characteristics and scope of various methods in each category. Next, cards system the fusion of the factor market distortion theory and the theory of economic growth structuralism theory, explores the context of theory development, the direction of technology development and the latest theory progress, finds both the theoretical basis and existing research less, and finds new research directions and entry points for the main content.Secondly, the measure of the degree of factor price distortion in China. In the research results of the existing measurement of China factor price distortion degree, the results vary widely, and their values differ by several times or even dozens of times. The paper comparative analyzes the research results of measuring China’s factor price distortions and find the main causes of the difference between the results. And takes the China’s macro-economy as a whole big department, with time series data during the period of 1978-2011 as the foundation, to establish time-varying elasticity production function model to measure the distortion degree of China overall economic factor prices. The measure results show that the factor share in our country is relatively stable in the long term, but the price of capital and labor factors have negative distortions, and most of the time, the degree of distortion of capital is higher than that of labor.Thirdly, the impact analyses of factor price distortions on China’s investment and consumption structure. Lacking of internal demand and over investment as the main feature of the investment consumption structure is an important issue which needs to be studied and solved in China’s macro-economy. Effects of the consumption structure of China’s investment for many reasons, but theorists think the influence mechanism of the factors relatively complex (Zhang & Xia,2012), even avoid theoretical analysis, additional monarch way simply from the measurement of the angle analysis of the problem (Fang et al.,2011), the emergence of theoretical research and empirical analysis is not consistent phenomenon. This paper argues that the investment consumption structure is a macro-economic problem, but the main reason is that there is a micro-basis, which is invisible hand behind the adjustment of social resource allocation. During the period of economic transformation, China factor market is severely distorted, which belongs to the micro-scope, factor market distortions play a role via distorting the price mechanism, thus causes macro-economic investment and consumption structure change. Therefore, the micro-level factor price distortions influence investment and consumption via the price mechanism, which is the deep reason for the change of investment and consumption structure. The paper is based on the modified Ramsey-Cass-Koopmans model, from the perspective of factor price distortions, to give an explanation framework to long-term steady development with high investment, low consuming economic facts of China’s economy in the transition period, and on the basis of the measure results of China factor price distort degree in Chapter Three, establishes VAR model to confirm the factor price distorts to change the consumption structure of investment in China through the metering data. Conclusions show that the negative distortions of capital and labor price can stimulate investment, reduce consumption, but the force of labor price distortions is larger; if labor price distortion is more serious than the capital, the structure of investment and consumption will not be more conducive to the improvement.Fourthly, the relationship analyses between fator misallocation and industrial structure adjustment. About the industrial structure effect of the factor market distort, the whole economy should be divided into a number of departments to carry on the structure research. Previous research has focused on China’s economy as a whole divided into two departments, three departments, enterprises of different ownership types, or in the same industry sector (mainly manufacturing) divided into many sub industries research, lacks the factor distortion degree and economic effect analysis of multiple divided sector belong to different industries. In this part, the paper first cracks the lack of data problem, estimates the capital stock and labor inputs covering multiple divided sector belong to three major industrial, and forms a complete set of added value GDP data; On the base of these, analyzes the theories and the verifies measurement to the relationship among the economic factor misallocation, the evolution of the industrial structure and the GDP growth rate, and further discusses the adjustment mechanism of the factor misallocation and the industrial structure change. Conclusion shows that factor misallocation causing the industrial structure effect is an important factor that affects China’s economic growth, but for the inter industry factor misallocation problem, the market mechanism cannot spontaneously adjusted, fiscal policy and monetary policy are relatively ineffective, that must be based on the corresponding industrial policy as a policy oriented.In short, this paper uses the combination research methods of the distortion theory and structure economics, carries a the system research on the structure effect analysis of production-factors market distortions, clarifies the related concepts of factors market distortion, expands the space for distortion theory in analyzing the economic structure questions, and draws conclusions on how to optimize the allocation of resources, improve production efficiency, achieve the future long-term and stable economic development, which has a positive and practical significance.