Analysis on the Post-COVID-19 Fiscal Policy Based on the Empirical Analysis of Financial Revenue and Expenditure

Abstract

The monthly data of China's national financial revenue and expenditure from January, 2012 to December, 2019 have been collected in this thesis. ADF Test, Johansen Test and Granger Test based on the monthly data have been investigated and the Error Correction Model have been set up. Results show that a long-term equilibrium exists in the national financial revenue and expenditure in the corresponding period from January 2012 to December 2019. When short-term fluctuations of fiscal revenue and expenditure deviating from the long-term equilibrium, the ECM Model could provide an adjustment at the rate of -0.3359. The existence of the two-way causality between national financial expenditure and revenue implies that the series of fiscal policies focusing on tax-break and lowering cost issued since the Eighteenth National Congress of the CPC have provided an inner initiative in the growth of economic growth, resulting in positive effects on stimulating the growth of national economy and increasing the national financial revenue to certain extent. To restart the economy restrained by the COVID-19, it would be effective to issue the fiscal policy concerning an increase in financial expenditure.