From The Demand Side To The Supply Side:A Comparative Study Of The Effects Of Active Fiscal Policy Transformation

In recent years,the growth of Chinese consumption and investment growth has continued to decline,and the "troika" that has driven economic growth has shown signs of weakness.At the same time,the characteristics of stagflation(high deficit,low growth)in the macro-economy and finance began to emerge.The fiscal deficit rate kept rising,but the GDP growth rate declined for many years in a row.This means that the implementation of proactive fiscal policies can reverse the economic weakness in the short term,but under the background of overall economic downturn,the effect of continuing to use the previous proactive fiscal policies starts to weaken,and long-term demand stimulus cannot guarantee sustained and stable economic growth.Under the new normal,the focus of China's active fiscal policy regulation has shifted from the demand side to the supply side,and supply-side structural reform has become a strategic measure to promote China's economic development.Specific fiscal and taxation measures include comprehensively replacing business tax with value-added tax,implementing preferential tax policies,reforming resource tax,introducing environmental protection tax,and increasing financial subsidies to small and medium-sized cities and rural areas.By reducing the production cost of enterprises,improving the efficiency of resource allocation,stimulating the vitality of microeconomic subjects,realizing independent innovation and technological progress,we seek new impetus for the long-term and stable development of China's economy.In the face of the new normal of economic development,how does fiscal policy affect economic growth?It's important to clear the role of fiscal policy and to make adjustments to the role of fiscal policy in a better way.This paper summarizes the connotation of fiscal policy and its operation stage in recent years,especially the transformation from the demand side to the supply side,and gradually clarifies the stage and mechanism of fiscal policy in promoting economic growth.Firstly,this paper summarizes the overall evaluation of the economic growth effect of fiscal policies by relevant scholars and the comparative analysis of the effect of policy tools,sorts out the studies on the nonlinear effect of fiscal policies in different periods,forms a literature review and makes a brief review on it.Secondly,the Keynesian effect and nonlinear effect of fiscal policy are analyzed,and the inconsistency of fiscal policy effect is pointed out theoretically.This paper reviews the practice of fiscal policies in China over the years and summarizes the characteristics of fiscal policies in stages.At the same time,based on the current macroeconomic situation of China and the impact of the reform of replacing business tax with value-added tax and individual income tax,the author puts forward theoretical prediction.Thirdly,on the basis of theoretical analysis,to construct the MS-VAR model,take the financial expenditure,tax,output,consumption,and investment of five indicators as variables,and analyze the empirical results.Focus on the impulse response analysis of the changes of output,consumption and investment under the impact of fiscal expenditure,total tax,business tax and value-added tax,as well as individual income tax,so as to clarify the effects of various financial instruments on output,consumption and investment in different regional systems.Finally,the paper summarizes the results of empirical analysis and points out that China's proactive fiscal policies do have different economic growth effects before and after the transformation,and that proactive fiscal policies show significant nonlinear efects on economic growth in the long run.Further research on business tax,value-added tax and personal income tax shows that in the current economic environment in China,increasing the proportion of direct tax and reducing the proportion of indirect tax will be conducive to economic growth.Combined with the actual situation of our country,this paper puts forward some policy suggestions,such as adjusting the fiscal policy according to the current economic environment,reducing fiscal expenditure,optimizing the tax structure,appropriately increasing the proportion of direct tax and reducing the proportion of indirect tax.