Research On The Target Selection Of Fiscal Policy Rules And Policy Effects

As one of the macro-control policy tools,fiscal policy plays an increasingly important role in the process of promoting stable economic development.From the active fiscal policy implemented in 1998,to the 4 trillion yuan investment economic stimulus plan in 2008,and to the 1 trillion yuan of special anti-epidemic government bonds in 2020,the practice of macro-control shows that fiscal policy has become an indispensable tool for stabilizing the economy.Under the general tone of the work of seeking progress while maintaining stability,the realization of multiobjective dynamic balance is the key content of economic work.This puts forward higher requirements for the effectiveness of fiscal policy and the rationality of policy rules.Reasonable fiscal policy rules can regulate multiple policy objectives,which is conducive to realizing the dynamic balance of multiple objectives.Therefore,how to optimize fiscal policy rules has become the focus of academic research.It is generally considered that controlling government debt and maintaining economic growth are the main goals of fiscal policy rules,while stabilizing inflation is the main goal of monetary policy rules.With the financial theory that price level is determined,the academic circles begin to consider the role of fiscal policy in stabilizing inflation.Based on this,this paper incorporates inflation into the fiscal policy rules and expands the target system of fiscal policy rules.On this basis,this paper measures the operable space of fiscal policy,explores the optimization path of fiscal structure to promote the expansion of fiscal policy space,and explores the impact of fiscal policy on policy objectives from three aspects:policy structure,policy intensity and emergencies.This paper first expands the target system of fiscal policy rules,and constructs the response function of fiscal policy by introducing inflation target into fiscal policy deficit rule.Then,we use the time-varying cointegration model to test the dynamic relationship between fiscal policy and policy objectives,and find that there is a long-run equilibrium relationship between fiscal policy and economic growth,inflation and government debt,and the relationship has significant time-varying characteristics.Further,based on the fiscal policy reaction function,this paper constructs a time-varying parameter stochastic volatility vector autoregressive model to capture the time-varying effects of fiscal policy on economic growth,inflation and government debt under the rule constraints,and compares the fitting effects of fiscal policy reaction function under different pegged targets.The results show that fiscal deficit has significant time-varying policy effects on government debt,economic growth and inflation.The expansion of fiscal deficit under the constraint of rules can promote economic growth and restrain inflation,but will cause the expansion of government debt.In addition,we also find that the fiscal policy has gradually shifted to the "rule-based" regulation mode,that is,the policy preference has more economic regulation objectives.Considering that the fiscal policy is constrained by the operational space of fiscal policy in the process of adjusting the policy target.Under the framework of expanded target system,this paper measures the size of fiscal policy space,explores the sustainability of China’s fiscal policy,and analyzes how to achieve the expansion of fiscal policy space through the internal optimization of fiscal structure.This paper uses the measurement methods of fiscal surplus sustainability gap,de facto fiscal space and Laffer curve peak surplus gap to measure the fiscal policy space from multiple angles,and analyzes the changing trend of China’s fiscal policy space indicators and the sustainability of fiscal policy.Further,based on the state-dependent local projection(SD-LP)model,this paper analyzes the effects of fiscal expenditure structure and tax structure on the space of fiscal policy in different economic cycles,and tries to promote the sustainability of fiscal policy by adjusting and optimizing the internal structure of fiscal policy.The results show that China’s fiscal policy space has gradually narrowed after the financial crisis,and the sustainability of fiscal policy has been declining.From the perspective of overall structure,increasing the proportion of direct tax can promote the expansion of fiscal policy space in China,while productive fiscal expenditure preference is not conducive to the expansion of fiscal policy space.From the perspective of internal adjustment of fiscal policy structure,increasing the proportion of value-added tax,consumption tax and income tax is not conducive to the expansion of fiscal policy space during the period of economic expansion,among which the individual income tax has a stronger inhibitory effect than the enterprise income tax;In the short term,increasing the proportion of economic construction expenditure,culture and education expenditure and social security expenditure all have a significant inhibitory effect on the space of fiscal policy,while increasing the proportion of health expenditure is conducive to promoting the expansion of fiscal policy space.In the long run,increasing the proportion of health expenditure and culture and education expenditure will play a certain role in promoting the space of fiscal policy.In the economic recession period,in the short term,increasing the proportion of health expenditure and consumption tax is more conducive to promoting the expansion of fiscal policy space;In the long run,increasing the proportion of value-added tax,income tax,economic construction expenditure,health expenditure and social security expenditure has a certain promotion effect on the fiscal policy space,and the promotion effect of personal income tax is more significant.In order to explore the effectiveness of fiscal policy under the expanded target system framework,this paper firstly explores the dynamic effects of fiscal policy shocks on policy objectives such as economic growth,inflation and government debt from the perspective of policy structure.Because different types of fiscal expenditures and taxes play different roles in macroeconomic regulation and control,and are affected by the external economic environment,that is,the effects of fiscal policy structure on macroeconomic variables are heterogeneous in different economic cycles.Therefore,this paper uses the time-varying parameter factor extended vector autoregression(SV-TVP-FAVAR)model with stochastic volatility to explore the dynamic effects of fiscal tax structure and expenditure structure on economic growth,inflation and government debt in the recession period,economic recovery period and economic stability period respectively from a multi-dimensional perspective.The results show that in terms of economic growth,increasing the proportion of economic construction expenditure,health expenditure and consumption tax is more effective in promoting economic recovery in the recession period caused by the financial crisis,while increasing the proportion of health expenditure,cultural and education expenditure and personal income tax is more effective in the recession period caused by the COVID-19 pandemic.During the period of economic recovery,increasing the expenditure on culture and education,health expenditure and the proportion of value-added tax are more effective in regulating economic growth.In the stable period of the new normal economy,the structural adjustment direction of increasing the proportion of economic construction expenditure,cultural and education expenditure,value-added tax and individual income tax is more effective in regulating economic growth.In terms of inflation,during the economic downturn caused by the financial crisis,increasing the proportion of health expenditure,social security expenditure,value-added tax and personal income tax can more effectively stabilize the price level and control inflation.In the period of economic recession caused by COVID-19,increasing the proportion of economic construction expenditure,culture and education expenditure,health expenditure,social security expenditure and personal income tax has a stronger effect on inflation control;During the period of economic recovery,increasing the proportion of economic construction expenditure,health expenditure,social security expenditure,value-added tax and personal income tax can significantly restrain inflation;In the period of stable economic development,the proportion of economic construction expenditure,health expenditure,social security expenditure,consumption tax and personal income tax is more effective in stabilizing the price level.In terms of government debt,increasing the proportion of economic construction expenditure,health expenditure,value-added tax,consumption tax and personal income tax can more effectively relieve the pressure of government debt in the economic recession period caused by the financial crisis,while increasing the proportion of cultural and education expenditure,health expenditure,value-added tax,consumption tax and personal income tax can restrain the expansion of government debt in the economic recession period caused by the COVID-19 pandemic;Increasing the share of health spending,value-added tax,consumption tax,and personal income tax can reduce government debt burden the most during periods of rapid economic recovery and stable economic growth.At the same time,this paper explores the nonlinear effects of fiscal policy on economic growth,inflation and government debt from the perspective of fiscal policy intensity.This paper uses the multi-directional quantile vector autoregressive(MDQVAR)model to explore the optimal fiscal policy instrument and the intensity of policy implementation under the three economic objectives of economic growth,price stability and debt control,as well as the impact of structural changes of fiscal policy on policy objectives when coordinating with monetary policy.The results show that: during the economic downturn,the combination of low-intensity tax policy and loose quantitative monetary policy can quickly promote economic recovery and achieve the goal of stable economic growth;During the period of economic overheating,the coordination of high-intensity tax policy and tight price-oriented monetary policy can stabilize the price level more effectively and achieve the goal of controlling inflation.During the period of economic stability,the coordination of high-intensity fiscal expenditure policy and tight price-based monetary policy can achieve the three goals of stabilizing economic growth,controlling inflation and reducing government debt,and when the proportion of productive fiscal expenditure is adjusted to a medium level,the macro-control effect of policy combination is further enhanced.Finally,this paper analyzes the impact of fiscal policy on policy objectives from the perspective of emergencies.This paper introduces the utility shock of service consumption into the nonlinear New Keynesian dynamic stochastic general equilibrium(NK-DSGE)model including heterogeneous households and firms,quantifies the impact of COVID-19 on the macro economy,and compares the implementation effect and multiplier effect of various fiscal policies under the impact of COVID-19.The results show that,on the one hand,the impact of COVID-19 affects the entry and exit of enterprises in the service sector,which has a negative impact on the macro economy.Proactive fiscal policy has played a countercyclical role in dealing with the impact of the epidemic,effectively alleviating the economic recession.By comparing the multiplier effects of the policies of increasing government purchase,tax reduction and government transfer payment,we find that the tax reduction policy is the most effective in stabilizing household income and promoting consumption growth,while the fiscal policy of increasing government expenditure is more effective in increasing output and employment.