National Income Accounting and Public Policy

Modern national income accounting was designed in the early 20th century for the purpose of providing improved indicators about the performance of the economy so that government policy makers could better control the economy. The way that performance is measured affects the types of policies used to try to accomplish policy goals. Two attributes of national income accounting are analyzed for their effects on economic policy. First, government production is included in the national income accounts at cost, rather than at market value as private sector output is measured. This biases policy toward a larger public sector. Second, output is measured as a homogeneous dollar amount. This biases policy toward focusing on increasing quantities of inputs and outputs in the production process, rather than on innovation and entrepreneurship, which are the true engines of economic progress. Economic policy could be improved by focusing less on national income as an indicator of policy, and more on the underlying processes that foster economic progress.     

中国货币政策中介目标与经济增长

货币政策中介目标是货币政策体系中的重要组成部分,合适的货币中介目标对保持国民经济持续稳定增长具有重要意义。采用基于ARDL模型的协整分析方法,对货币中介目标与中国国民经济增长的关系进行了深入研究,发现通货膨胀率对国民收入的影响幅度最大、货币供应量对国民收入的影响次之,而利率对国民收入的影响相对较小。认为在目前条件下,我国应从过于强调货币供应量指标,转向综合利用多种金融变量来指导货币政策的操作,但在将来市场体系完善后,可考虑采用通货膨胀作为货币政策中介目标。     

RE-EXAMINING THE EFFECTIVENESS OF STABILISATION POLICY

This paper develops an alternative international macroeconomic model for evaluating the effectiveness of fiscal and monetary policy in stabilising national income under fixed and floating exchange rates. It encompasses national output and income, saving, investment, money and capital flows and linkages between the exchange rate, price levels and real interest rates consistent with international parity conditions. It demonstrates that the nature of government spending is pivotal to the effectiveness of fiscal policy, revealing that, ceteris paribus , higher public consumption expenditure contracts national income and depreciates the exchange rate, whereas higher productive public investment spending has opposite effects. The framework also shows that the effectiveness of fiscal and monetary policy as macroeconomic policy instruments is not ultimately dependent on the exchange rate regime.     

Consumer sentiment and countercyclical fiscal policies

We re‐explore the consequences of some popular countercyclical intervention rules in a simple Keynesian‐type macroeconomic model in which the dynamics of consumer sentiment and business cycles are intertwined. We find that fiscal policy does not only have a direct effect on national income via the well‐known Keynesian multiplier process but also an indirect effect by affecting consumer sentiment. The good news is that the indirect effect may amplify the direct effect and therefore increases a policy‐maker’s impact on national income. However, the bad news is that due to the interactions between the business cycle and the evolution of consumer sentiment, the stabilization of national income is an intricate matter.     

THE DISTRIBUTION OF INCOME AND WEALTH IN JAPAN

This paper reviews research on the distribution of income and wealth in Japan, identifies sources of data on income and wealth, and describes limitations of these data. Evidence that Japan's poorest income groups are relatively well-off is convincing, but there is less evidence that the overall distribution of income in Japan is more equal than in other OECD countries. Agricultural policy, social welfare policy, the tax system, trends in earnings differentials, and the role of the Japanese family are among the many factors that have shaped Japan's income distribution. The rapid appreciation of the stock market and land prices during the late 1980s led to greater inequality in the distribution of wealth. Rapid population aging is expected to lead to an increase in total national wealth relative to national income which may have an adverse impact on the distribution of income.     

Artificially Low Interest Rates as Export Promotion Policy

We reconsider the effects of a policy that sets an artificially low interest rate. Such a policy involves a combination of an interest rate ceiling and a rationing rule that assigns a priority‐lending status to export sectors over domestic service sectors. We demonstrate that the policy works as an export‐promotion policy, and improves national income. Furthermore, under some conditions, the policy expands the domestic service sector, despite the reduced amount of funds owing to the rationing rule. Finally, the artificially low interest rate improves national welfare.     

外资促进了国民收入增长吗?——基于空间经济学的分析

本文运用空间经济学中的FCVL模型,分析了FDI与国民收入之间的关系,指出外资促进国民收入增长的条件是外资与本土企业建立紧密的垂直关联。中国未来引资政策的重点应是促进FDI与本土企业建立紧密的垂直关联。     

完善我国个人所得税制的构想

个人所得税是我国税收的主体税种,在对社会成员收入分配的调节中具有其他税种无法替代的作用,是贯彻国家宏观政策、体现社会公平的重要工具。我国的个人所得税制从建国初到现在,虽几经合并与改革,但从经济和社会发展及国际税收发展趋势等视角来看,仍然存在着诸如课税模式老化;税率设计不合理、边际税率过高;计征方法和费用扣除标准不合理;征管效率低下等问题。改革和完善我国现行个人所得税制,建立科学合理的个人所得税征收管理制度,是我国目前收入差距逐渐扩大,经济结构需要转型的新形势下亟待研究的重要课题。本文通过对我国现行个人所得税制种种弊端的分析,提出了应建立适合我国国情的分类与综合相结合的个人所得税模式;逐步扩大个人所得税税基范围;调高个人所得税免征额;实行＂少档次、低税率＂的累进税率模式;增加家庭联合申报方式;加强税收征管,减少税源流失等改革构想。     

Numerical simulation on property tax reform: evidence from China

This article analyses the property tax reform in China in a computable general equilibrium model that recognizes the interaction between and among housing markets in different provinces and macroeconomic development. Using real data in 2010, we present the benchmark equilibrium for reference property and income tax rates. Then, we examine different property and income tax policies and make a comparison of their production, consumption, welfare and national income. We find that the implementation of property tax would decrease the house production at the expense of welfare in taxed area. The expansion of the taxed regions may increase the total social welfare and national income. Even though property tax policy may not be able to change the income distribution in China, increasing income tax rate could narrow the income disparity. Finally, this article shows the reliability of the conclusions when sensitivity analysis on optimal condition of equilibrium computation is performed under varied property tax policy.     

Keynes versus Wagner: public expenditure and national income for three African countries

The public expenditure/income hypothesis has long been debated in economics. Following Keynes, public expenditure is seen as an exogenous factor to be used as a policy instrument to influence growth. On the other hand, Wagner argues that expenditure is an endogenous factor or an outcome, not a cause, of growth in national income. The purpose of this paper is to apply both the Granger and Holmes-Hutton statistical procedures to test the income-expenditure hypothesis for three African countries-Ghana, Kenya and South Africa. We find that the hypothesis of public expenditure causing national income is not supported by the data for these African countries.     

The Institutionalist Perspective on Recent Theories of Direct Foreign Investment: A Comment on McClintock

This article holistically addresses the effective (relative) income tax contribution of a given income (or, wealth) group. The widely acclaimed standard in public policy is the absolute benefaction of a given income group in filling up the fiscal coffers. Instead, we focus on the ratio of the average income tax rate of an income group divided by the percentage of national income (or wealth) appropriated by the same income group. In turn, we develop the Fiscal Inequality Coefficient which compares the effective percentage income tax payments of pairs of income (or wealth) groups. Using data for the United States, we concentrate on pairs such as the Bottom 90% versus Top 10%, Bottom 99% versus Top 1%, and Bottom 99.9% versus Top 0.1%. We conclude that policy makers with a strong social conscience should re-evaluate the progressivity of the income tax system and make the richest echelons of the income and wealth distributions pay a fairer and higher tax.     

Perspectives on Australian Retirement Incomes

With important developments over the past two decades in Australian retirement income policy, projected future outcomes—for the public purse, for the national economy and for the future retired—have received considerable attention. This focus on the future should not, however, cause us to lose sight of the present. While the major changes in retirement income policy outcomes will not occur for some decades, the picture for current and recent cohorts of retired people is not static. This article begins with an account of the important policy developments since the 1980s in the Australian retirement income arena—the Australian retirement income system still differs radically from that in most other countries, in relying heavily on a means‐tested income maintenance system, rather than on social insurance. The outcomes for current and recent cohorts of retired people are then examined from two perspectives. The first perspective is an examination of the incomes of the aged in the mid 1990s and of trends over the 1980s and 1990s—including consideration of changes in the level, composition and distribution of aged incomes. The second perspective is an international comparison of the incomes of the aged.     

HETEROGENEITY IN A CURRENCY UNION WITH SOCIAL MARKET OBJECTIVES

In this paper, we explore whether heterogeneity among union members could threaten the stability of the European Monetary Union. The types of heterogeneity we consider are (1) asymmetries in the transmission of monetary and fiscal policies, and (2) differences in national preferences for price stability, output growth, and income redistribution. Our results show that the costs of membership can be significant for countries whose transmissions, structure, or preferences deviate from those underlying the common monetary policy. In part, these costs arise because monetary policy imposed by an independent central bank automatically constrains the use of fiscal policy by national governments.     

The political economy of income comparisons and economic growth

The literature on income inequality has provided various explanations as to how income inequality can affect growth, with the emphasis on ideas such as investments in human capital, issues of occupational choice, or the redistributive policies of governments. Inequality not only has a direct effect on the distribution of consumption in an economy, but it also has a powerful effect on people's subjective sense of well being. This paper takes a novel approach by focusing on the way in which a government's choice of economic policy can be influenced by how individuals perceive themselves relative to other individuals, both within the country and in foreign countries. The chosen policy affects economic growth, with the assumption being that policies that promote growth also tend to result in more switching of individuals between income groups. We show that the government's optimal policy depends on the importance of both inside country and outside country income comparisons, the fraction of national income earned by the different income groups, the potential magnitude of economic growth, the probability of switching between income groups in the presence of growth, and the relative importance of the various income groups. The model predicts that a greater degree of inside country income comparison is bad for growth whereas more outside country comparison is good for growth.     

Income Provision in Old Age

Few areas of public policy impinge more directly on individual lifetime welfare than those directed at retirement income. While policy initiatives implemented since the start of the 1970s fall short of major reform, there have nevertheless been substantial changes in the real value of pensions, the coverage of pensions, and the tax treatment of various forms of retirement income. The objective of this article is to catalogue these changes in policy, and to identify the combination of political philosophy and socio-economic pressures underlying them. It also analyses some of the economic consequences of these policies and examines the question of national superannuation. The article concludes that, for the present at least, any reforms in the area of retirement income provision seem likely to be limited to the refinement of the status quo.     

中国高储蓄率问题探究——1992-2003年中国资金流量表的分析

本文以国家统计局公布的1992—2003年中国资金流量表为基础,从收入分配和部门储蓄倾向等两个方面对居民、企业和政府等国内三个部门的储蓄率进行了比较分析。我们发现,尽管居民部门的储蓄率最高,但是,自1992年以来,它实际上呈逐步下降趋势,其主要原因在于居民部门获得的劳动报酬、财产收入和再分配收入均有所下降;企业储蓄率呈现缓缓上升趋势,主要原因并不在于企业盈利能力的提高,而在于其主要支出——对居民部门的劳动报酬支出和利息支出长期被稳定在较低的水平上;政府储蓄率在经历了上个世纪的低位徘徊之后,于2000年以后急剧上升,其主要原因在于,通过初次分配和再分配,政府的可支配收入在国民收入的分配中占据了越来越大的份额,同时政府部门的储蓄倾向也在不断提高。本文的政策建议是:为了实现以提高国内消费率为核心的经济发展战略,我国的经济运行应全面转向以改善收入分配结构、提高居民收入为重点的轨道上。为达此目的,加速财政政策向公共财政转型,增加公共支出和对居民的福利支出,在提高劳动生产率的基础上提高企业对劳动者的支付水平,应成为今后我国宏观调控的长期任务。     

个人收入分配的选择之道

收入分配关系到一国经济长期、稳定的发展。传统的分配理论关注的是个人拥有的资源禀赋和国家政策与个人收入的关系,将收入分配看成是不受个人影响的因素决定的,忽视个人在收入分配中的作用。本文试图从个人的信息量的不平衡、需求偏好、风险偏好以及决策后形成的扩散效应来分析个人选择对收入初次分配和再次分配的影响。     

Measuring national economic performance without using prices

Recent years have seen increasing awareness of the deficiencies of conventionally defined national income as a measure of a nation's overall economic performance. Alternative measures have been proposed involving either the modification of national income accounting conventions, or the abandonment of national income itself in favour of something such as the Genuine Progress Indicator, GPI. However, such alternatives, like national income itself, all involve the use of monetary valuation for aggregation. This paper proposes a new approach to the measurement of national economic performance, which follows naturally from ecological economics as the study of economic activity rooted in a proper appreciation of its material circumstances, and which does not involve using prices for aggregation. The paper gives some results for three variants of the new approach, and compares and discusses them. While this new approach does not purport to provide a single definitive assessment of the sustainability of current economic activity, which is an infeasible goal, it could provide useful inputs to relevant research activity, and to policy analysis and debate.     

Monopoly pricing with negative network effects: The case of vaccines

We study the market for vaccinations considering income heterogeneity on the demand side and monopoly power on the supply side. A monopolist has an incentive to exploit the external effect of vaccinations and leave the poor susceptible in order to increase the willingness to pay the rich. Even the possibility of price discrimination does not remove this incentive. We demonstrate that the weaknesses of standard policy measures are mitigated when income heterogeneity is taken into account. This offers an efficiency based rationale for distribution oriented national or international public health interventions.