Fiscal Policy, Regional Disparity and Poverty in China: A General Equilibrium Approach | Zendy

Wang Li | Zendy; Xuesong Li | Zendy; Wenbo Wang | Zendy; Zhou Guangbao | Zendy

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Fiscal Policy, Regional Disparity and Poverty in China: A General Equilibrium Approach

Author(s) -

Wang Li,

Xuesong Li,

Wenbo Wang,

Zhou Guangbao

Publication year - 2010

Publication title -

ssrn electronic journal

Language(s) - English

Resource type - Journals

ISSN - 1556-5068

DOI - 10.2139/ssrn.1691144

Subject(s) - general equilibrium theory , economics , fiscal policy , poverty , china , macroeconomics , development economics , political science , economic growth , law

The main objective of this research is to analyze the effects of the fiscal dimension of China’s government transfer and preferential tax policy on regional income disparity and poverty reduction. Using a computable general equilibrium model with a three-region component, we find that the preferential tax policy on the eastern coastal region of China has a significant effect on household income, as well as on the FGT indicator. The simulation results suggest that tax policy is a more effective tool to counter against China’s regional disparity than government transfer.

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