Environmental Science
8 years ago

China's Fiscal Policy Unsustainable, Urgent Shift Needed for Economic Stability.

Zhongguo ruankexue
Test on Sustainability of Fiscal Policy in China Based on Structural Primary Gap
Liyong Wang

Paper Summary

The study estimated China's potential output and output gap using a dynamic model. By calculating the structural primary gap, it found that the current fiscal policy in China is unsustainable. This suggests that the government should shift from an expansionary fiscal policy to a neutral one.

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