Should Fiscal Policy Focus on Asset Price Volatility-A Debate about the Relationship between Them
WU Jun1, XUE Xiao-yu1, LIU Zhao2
1.School of Banking and Finance, University of International Business and Economics, Beijing 100029, China;2.Financial Publishing House, Beijing 100071, China
Abstract：
The fluctuation of Assets price is a difficult problem that every government has to deal with. When facing the wave, government usually cannot handle it properly, which leads to a serious mistake. In the period of economic crisis, whether the adjustment of macroeconomic regulation, especially the fiscal policy, has to react to the fluctuation of Assets price is becoming an important topic to treat with. This report deeply researches on the mutual relations between fiscal policy and the fluctuation of Assets price by analyzing the influence channel. Beyond that, in this paper, we construct the SVAR model using the Chinese data to study the relationship between them. The view of this report is concise. In the period of financial crisis, the implementation of fiscal policy in China has to be combined with the fluctuation of Assets price in the capital market, and the government also has to track and give attention to the adjacent point. As far as the practical operation is concerned, the report indicates that the Assets price should be the assistant goal of Chinese macroeconomic regulation, which monitors the fluctuation, rather than the direct goal of regulating Chinese fiscal policy. Besides paying attention to the direct influence of fiscal policy on the real economy, the government also has to consider the indirect influence of the fluctuation of Assets price on it.
2014 
