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

Li Wang, Xuesong Li, Wenbo Wang and Zhou Guangbao

Working Papers MPIA from PEP-MPIA

Abstract: 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.

Keywords: China; Regional Disparity; Fiscal Policy; Government Transfer; Preferential Policy; Poverty; CGE; FGT (search for similar items in EconPapers)
JEL-codes: D58 H24 H32 H53 R13 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-cmp and nep-tra
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:lvl:mpiacr:2010-11

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