Empirical Analysis And Advice Research On The Optimal Size Of Local Government Debt

In 2008,a financial crisis,the global economy worsened,and China's economy were also affected,in order to prevent the rapid decline in the domestic economy,the central government issued a timely manner appropriate anti-crisis policy,launched a four trillion plan to expand domestic demand,but arranged by the Ministry of Finance issuance of local government bonds to ease the difficult place to raise matching funds.March 2009 the central bank also proposed a "conditional support the formation of local government financing platform for issuing corporate bonds,medium-term notes and other financing tools,broadening the central government matching funds financing investment projects." In support of the central government,local financing platform for rapid development,followed by a rapid growth in the size of local debt.Although the first half of 2010,the central government has taken credit tightening,and require rectification of focal financing platform,but this did not curb the debt growth.According to data released by the Audit Commission,as of the end of June 2013,the local government debt balance of 17.890866 trillion for the presence of local debt too big,serious problems,such as the risk of default.To solve this problem,in September 2014,the State Council issued the "State Council on strengthening local government debt management advice," proposed to strictly regulate the local government debt financing mechanism for the implementation of local government borrowing limit management.Starting from the reality to the optimal size of local government debt for the study of the control of local government debt scale empirical analysis and countermeasures.First,the paper describes the core concepts of local government debt,debt-scale analysis of the formation factor,combing through the economic effects of public debt theory,based on a moderate scale of public debt sustainability analysis theory,the debt risk an economic point of control chaos theory,laid the foundation for research and countermeasures proposed articles of the theoretical basis;secondly,the current situation of China's local government debt,the structure and problems of in-depth analysis,and then to the KMV model for empirical analysis tools to study it transform from a local the relationship between the size of the debt and revenue of view,the optimal size of the model structure of local government debt,according to this model,after using auto regression method to predict the future annual local fiscal revenue,the country is divided into East and Midwest empirical estimates,obtained the results of East,West and Middle debt optimum size-specific data;and finally,the previous text normative analysis and empirical analysis based on the proposed guarantee optimal size of local government debt in Games in recomme ndatio ns.This paper argues that to protect our local debt is within the optimum size range,need to resolve the local debt stock and control the number of new history;strengthening the construction of local financial resources,reducing the size of government debt issuance;adjust the relationship between central and local finances,debt elimination system incentives;the transformation of government functions and the introduction of private capital investment;change official internal assessment system,impulse control and other aspects of internal borrowing to proceed.Through research and countermeasure of this paper,it is desirable to provide decision-making reference for local governments to control debt.