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Long-Run Fiscal Multiplier for Autonomous Prefectures in China

  • Yingxin Shi

    ()

    (Department of Economics & Management, Dalian Nationalities University)

  • Mototsugu Fukushige

    ()

    (Graduate School of Economics, Osaka University)

We overcome the problems of data availability and investigate the fiscal multipliers in autonomous prefectures in China. We first estimate the long-run elasticity of gross regional production with respect to fiscal expenditure in autonomous prefectures, using autoregressive distributed lag models. The estimated long-run elasticity is much less than unity, however, and the estimated fiscal multipliers for prefectures are between 0.61 and 4.93, with an average of 1.93. These results indicate that additional fiscal expenditure is still effective in increasing local income and promoting economic growth for most of the autonomous prefectures.

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File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/1310.pdf
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Paper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 13-10.

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Length: 15 pages
Date of creation: Jun 2013
Date of revision:
Handle: RePEc:osk:wpaper:1310
Contact details of provider: Web page: http://www.econ.osaka-u.ac.jp/
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