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Local Fiscal Expenditure and House Price: Theory and Evidence

Advances in Applied Economics and Finance

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Field Value
 
Title Local Fiscal Expenditure and House Price: Theory and Evidence
 
Creator Qiao, Kunyuan
 
Subject Static Mundell-Fleming Model; Local Fiscal Expenditure; House Price; Instrumental Variable Estimation
 
Description By analyzing a modified version of static Mundell-Fleming model, I derive that local fiscal expenditure positively affects house price. Then I test the hypothesis with panel data of China seventy upper middle cities from 1998 to 2009 and obtain the supportive evidence for nexus between local fiscal expenditure and house price; 1% change in local fiscal expenditure could result in a 3% change in house price, on the other hand, I ensure the causality between the two with instrumental variable estimation, and discover that when endogenizing the local fiscal expenditure, the magnitude could double. Therefore, local governments could take their fiscal expenditure as an instrument in controlling the house price.
 
Publisher World Science Publisher
 
Contributor —
 
Date 2012-02-27
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
—
 
Format application/pdf
 
Identifier http://worldsciencepublisher.org/journals/index.php/AAEF/article/view/104
 
Source Advances in Applied Economics and Finance; Vol 1, No 1 (2012); 37-44
2167-6348
 
Language eng
 
Relation http://worldsciencepublisher.org/journals/index.php/AAEF/article/view/104/128
 
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