On the morning of 26 November 2020, the 5th and 6th Xixian Forum of Income Distribution and Public Finance, co-organized by the School of Public Finance and Taxation and the Innovation Base for Income Distribution and Public Finance of ZUEL, were successfully held in 603 Wenquan Building. Dr Yao Yao of Cardiff University and Postdoctoral Scholar Dachian Shi of Wuhan University were invited to deliver keynote speeches on “Investing the effects of fiscal policy in the UK under the zero-lower bound on nominal interest rate” and “Government-business collusion, bilateral deterrence and environmental governance”. The forum was chaired by Professor Lu Yuanping, Executive Director of the Institute of Income Distribution and Public Finance. Professor Sun Qunli, Deputy Director of the Institute of Income Distribution and Public Finance, and Researcher Dr Wan Xin participated in the forum.
Dr Yao Yao's presentation focused on the effect and impact of the UK fiscal policy on stimulating the economy after the 2008 financial crisis in the context of zero-lower bound on nominal interest rate. She elaborated on four aspects of the study: background, theoretical model, data estimation and research findings. She noted that the limited ability to stimulate the economy using conventional monetary policy has led to more attention being paid to fiscal policy as an alternative to economic recovery. By introducing a new Keynesian dynamic stochastic general equilibrium (DSGE) model as a benchmark model and estimating filtered data from the second quarter of 1989 to the second quarter of 2017 using Bayesian estimation, Dr Yao concludes that fiscal policy is more effective in the context of zero interest rates. While in the extended model including financial frictions, she uses indirect extrapolation methods to estimate and measure unfiltered data for the same period, arguing that financial frictions amplify the effects of fiscal policy. At the end of the presentation, Dr Yao Yao summarised her research findings that fiscal stimulus can help economies escape from zero interest rates and improve social welfare when facing a liquidity trap.
Using the Interim Regulations on Giving Punishments for Illegal Acts and Disciplinary Offences in Environmental Protection promulgated in 2006 as a blueprint for his research, Dr Shi Daqian delves into the impact of bilateral deterrence policies on environmental governance by government officials and state-owned enterprises. Dr. Shi Daqian firstly outlined the background, framework and innovation of his research, and raised the question of whether bilateral deterrence (bilateral environmental accountability) could break the collusion between local governments and enterprises and ultimately affect environmental governance. Dr. Shi focuses on the Interim Regulations on Giving Punishments for Illegal Acts and Disciplinary Offences in Environmental Protection and further empirically analyses these issues by constructing a Differences-in-Differences (DID) model. The study concludes that environmental accountability can act as a bilateral deterrent, ultimately leading to the fight against environmental pollution.
Students and faculty agreed that Dr Yao and Dr Shi's research was deeply grounded in theory. During the interactive session, based on the faculty members' questions, Dr Yao answered detailed questions on the application of DSGE model and fiscal redistribution perspective. In response to questions, Dr. Shi explained the subject of the study, data collection and other issues. In closing, the participants expressed their appreciation to the two doctors for this research sharing with a round of applause.