Measuring China's Fiscal Policy Stance
This paper argues that the tradtitional way of gauging a country's fiscal policy stance by looking at government budget deficit or cyclically adjusted budget deficits is misleading in the case of China, since a lot of what usually would be considered fiscal policy is conducted via investment by state owned enterprises. The paper therefore proposes a different indicator for the fiscal policy stance, constructed from government consumption, government expenditure, the state-owned- enterprises' investments and tax revenue. Using this indicator, it can be shown that fiscal policy has been strongly counter-cyclical in China over the past two decades.
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- Lin, Guijun & Schramm, Ronald M., 2003. "China's foreign exchange policies since 1979: A review of developments and an assessment," China Economic Review, Elsevier, vol. 14(3), pages 246-280.
- Jia, Kang, 2002. "Pro-active fiscal policy in China since 1998: backgrounds and its emphases in practice," Journal of Asian Economics, Elsevier, vol. 13(5), pages 615-622.
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