Abstract： The combination of socialism and market economy is the core systematic attribute of socialism with Chinese characteristics， and also the most important theoretical contribution of the socialist political economy with Chinese characteristics， which mainly consists of two issues， namely the relationship between the plan and market， together with the compatibility or combination of public ownership and market economy. The combination is no doubt the core of socialist market economy from logical and historical perspective. And from the development of theory and practice experience we can tell that there are internal consistency and compatibility， but also contradictions and conflicts between public ownership and market economy. The unity of opposites roots in the special properties of the socialist public ownership， and results in the co-existence of both commercial and noncommercial attributes， which specifically show in the aspects about the overall sociality and locality of property right structure， plan and market， the equivalent exchange of labor and equivalent exchange of value， the ownership status and commodity properties of labor， the market economy and common prosperity， etc.. The essence of the organic combination of public ownership and market economy， as well as the essence of the socialist market economy， is to comply with the laws of market economy and to follow the requirements of public ownership simultaneously， which also means that it is necessary to take advantage of market economy and reveal the superiority of the socialist system at the same time. It is important to understand the special relationship between public ownership and market economy， to take advantage of publicowned economy and to make a better combination of public ownership and market economy while let market play the decisive role， so that to insist on and develop socialism with Chinese characteristics， and to comprehensively deepen economic reform under the new historical conditions.
Key Words： Public Ownership; Market Economy; Socialism

Abstract： The difference between Marxist political economy and western economics is that the former is more inclusive and the latter is more limitative. Basing the innovation driving theory on Marxist political economy， can absorb all beneficial achievements of western economics to be adopted by us， reveal the limitations of the capitalist market economy， and study adequately the non-material characteristics of the broad masses of the people. The innovation driving force is determined not only by the amount of human investment， but also by how labor works， including practice of education， learning， working and innovation. While encouraging entrepreneurship， it is necessary to encourage the new start-up enterprises to promote technological innovation， to promote the emergence of new inventions， new products， new markets and new organizations， and thus to promote the transformation of the economic development mode. A country's economic development depends on both employers' and employees' innovation. It will greatly stimulate employees' enthusiasm of innovation that an enterprise remunerates employees who engage in innovation， which will be helpful for improvement of entrepreneurial and social productivity， and also for entrepreneurial own long-term interests. The people from all social strata are subjects of innovation driving， whose combined efforts and powers are what economic sustained and sound development should depend on.
Key Words： Marxist Political Economy; Innovation Driving; Economic Development; Capability Source; Motive Power Combination

Abstract： According to the level of debt ratio， an economy can be distinguished in two situations： normal and abnormal state in debt. Under the normal state in debt， the debt has no feedback effect on the economy. Nevertheless， the economic operation has a feedback effect on the debt. That is， under certain condition the debt can be accumulated continuously along with economic growth. This will make the economy shift from the normal to the abnormal state in debt. When the economy is under the abnormal state in debt， the high debt ratio begins to have a negative feedback effect on the economy， thus leading to the economic crisis. The economic crisis caused by the debt usually cannot be saved by conventional macroeconomic stabilization policy， only unconventional stabilization policy can rescue the economy in crisis. The so-called “unconventional stabilization policy” is essentially the government paying the debt of companies or financial institutions. However， this policy may cause “time inconsistency” and “moral hazard” among other problems. In order to avoid the “time inconsistency” and “moral hazard”， it must be the “punitive bailouts”. As for government， the “punitive bailouts” is the fundamental way to response to debt crisis.
Key Words： Debt Crisis; Unconventional Stabilization Policy; Punitive Bailout; Macro-dynamic Model

Abstract： China has a dual-track financing system： there exist two financial markets， a formal one and an informal one， and the co-existence is sustained with both price and quantity distortions. The formal interest rate is depressed by price regulation， resulting in a shortage of credit supply， while the quantity regulation allocates credit to certain sectors， crowding out other firms to informal markets. Interest rate liberalization in China should take dual-track system into consideration， where both price and quantity distortions should be corrected. Based on a general equilibrium framework for dual-track financing system， we elaborated on the mechanism of interest rate liberalization with theoretical deduction and numerical simulation. It is found that interest rate liberalization has different effects on different markets， increasing formal interest rate by 3.01—3.69 percentage points and reducing informal rate by 0.85—1.19 points. It is also shown that the mechanisms are not the same for price and quantity reforms， and the informal rate can only go down with quantity reform.
Key Words： Informal Financing; Credit Rationing; Interest Rate Marketization

Abstract： China is going through rapid economic restructuring and relocation： energy-and emission-intensive sectors are moving from high-income eastern coastal areas to lower-income mid and western areas of China. Whether emission trading would intensify this trend and cause pollution-heaven in lower-income regions？ Is there a proper design of trading mechanism that can mitigate pollution-heaven effect and lead to a more harmonized growth pattern across regions？ We established a theoretical general-equilibrium model to analyze the incentives of alternative design of emission reduction policies to emitters; and on that basis， we established an inter-regional CGE model of China to test the results of the theoretical model in the context of Chinese economic structure. We concluded that， compared with regional intensity target， emission trading can mitigate pollution-heaven effect in mid-and western-regions， while the effect can be further amplified when the emission permits are initially allocated among emitters by auction.
Key Words： Carbon Market; Permits Allocation; Industrial Transfer; Structural Change; Multi-regional CGE

Abstract： Since the credit crunch can cause the bankruptcy of the firm， the bank needs to balance the costs and benefits of the credit crunch. We find that in a long-term relationship lending there is an inversed U-shaped relation between firm's value and the loan interest rate， and the optimal loan interest rate that maximizes the the firm value should optimally balance the financing cost and the bank's lending incentive. Although the financing cost decreases as the loan interest rate decreases， the firm can obtain a sustainable and inclusive financial support from the bank only if the loan rate matches the firm's profit uncertainty. This paper provides a new theoretical framework for the relationship lending as well as a new explanation for the high financing cost of SMEs.
Key Words： Capital Chain Breaks; Interest Rate Marketigation; Inclusive Finance; Real Option

Abstract： Information asymmetry is one of the most important reasons leading to the financial constraints faced by firms. According to the “upper echelons” theory， as the one whose primary responsibility is about information disclosure of the firm， the board secretary's background and characteristics should have some significant influence on the lowering of the information asymmetry between outsiders and insiders， and thus ease the financial constraints faced by the firm. We find that when the board secretary has financial working experiences， the investment-cash flow sensitivity of the firm is lower， which represents a lower financial constraints level. When we use KZ index and SA index to measure the financial constraints alternatively， or take some tests resolving possible endogenous problems， we can get the consistent results. Meanwhile， we find that the longer time working as a financial expertise and with the higher professional level， the larger impacts will the board's secretary exert. Further analysis shows that the board secretary with financial background attracts more analysts following and more institutional investors. At the same time， the fact that the board secretary will bring larger influence on the alleviating of the financial constraints when the firm is facing severer information asymmetry shows that， this alleviating effect is realized through lowering the information asymmetry of the firm.
Key Words： Financial Constraints; Financial Experience; Board Secretary; Information Asymmetry

Abstract： The public has long been concerned about the politician-to-firm revolving door in which formal government officials serve as independent directors of listed firms. It is questioned that they do not just provide monitoring and consulting services， but can exploit their government networks to acquire resources and facilitate rent-seeking for firms. We explore this question by using a natural experiment in which independent directors who are formal government officials are forced to resign due to a CPC regulation. We find that the market value drops 2% more in a (-5，+5) announcement window if the resigned independent director is a formal government official， and the negative market reaction is positively associated with the official's political rank and cannot be offset by the firm's political capital， whether it is state ownership or CEO's political connection. Additional analyses show that the value of official independent directors is partly derived from tax benefits and government subsidies they can bring. However， no evidence indicates that official independent directors perform better in monitoring or consulting. Overall， these results suggest that official independent directors contribute to firm value by playing a rent-seeking role other than monitoring or consulting role. This study also proves the feasibility and effectiveness of suppressing corruption by curbing politician-to-firm revolving door.
Key Words： Independent Directors; Government Officials; Political Connection; Rent Seeking

Abstract： Kahneman， the Winner of 2002 Nobel Prize for Economics， summarizes the non-rational factors of decision in overconfidence and anchoring effects. While the existing research only examines the non-rational factors of overconfidence， neglects the research on the anchoring effects in acquisition premiums. Therefore， the paper aims to examine the anchoring effects of acquisition premiums decision. Based on the data of acquisition events from 2004 to 2011， the paper finds that： although the acquisition premiums decisions are dominated by rational factors， there are anchoring effects in a certain degree. The details are follows： when the decision situation only exists the self-generated anchor， the acquisition premiums decision shows the self-generated anchor effects; when the decision situation only exists the experimenter-provided anchor， the acquisition premiums decision shows the experimenter-provided anchor effects; when the decision situation exist both the experimenter-provided anchor and experimenter-provided anchor， the self-generated anchor effects still exist， while the experimenter-provided anchor effects will be weakened or faded. The paper further finds that the consultant will weaken the anchor effects of acquisition premiums decision.
Key Words： Acquisition Premiums Decision; Anchoring Effects; Self-generated Anchor Effects; Experimenter-provided Anchor Effects

Abstract： This paper studies the long-run effect of postponing retirement on labor supply under the regime that fertility constraints are relaxed， and there are intergenerational transfers and the substitution relation between quantity and quality within families. We assume that the intergenerational transfer is affected by economic factors and test it using the China Family Panel Studies data. We find that postponing retirement would change the substitution relation between quantity and quality in families' fertility choice， but its effect on the labor supply depends on the relative weights of quantity to quality in parents' preference. If parents care less about the quantity of children， relative to the quality of children， then postponing retirement would decrease the growth rate of the quantity of the labor supply and increase the growth rate of the quality of the labor supply. And vice versa. It implies that it is important to evaluate the effects of postponing retirement both on the quantity and on the quality of the labor supply.
Key Words： Retirement; Ageing; Fertility; Labor Supply

Abstract： Using Alkire and Foster's multidimensional poverty measurement and Foster's duration method， this paper constructs the chronic multidimensional poverty index and average poverty duration index analyses Chin's chronic multidimensional poverty incidence from both static and dynamic perspectives， and explores macro and micro factors of causing poverty by multi-level regression model. The results show that chronic multidimensional index can not only measure household poverty incidence， but also reflect the average duration of household poverty. The incidence of multidimensional poverty is higher in rural households than in urban households. However， as the duration of poverty prolonged， the average deprivation deepness of poor households between urban and rural areas reverses obviously and urban household poverty incidence becomes severer. Household registration system (hukou) can account for 43% of difference of chronic multidimensional poverty incidence and 17% of difference of inequality of household poverty between urban and rural areas. The study shows that the incidence of chronic multidimensional poverty and its inequality are also affected significantly by factors including the characteristics of household head， social relation， population size of household and structure， household registration system. Finally， the paper offers several feasible suggestions for future poverty reduction strategy according to the China's situations.
Key Words： Chronic Multidimensional Poverty; The Duration Approach; Multilevel Logit Model; Dynamic Change; Inequality

Abstract： Under the framework of the expected utility theory， this paper conducts an empirical analysis on household economic fragility to examine the effects of mortality risk on the households' consumption and the resulting welfare. We separate the effects of mortality risk into two parts： the averaged decrease of consumption and the fluctuation of consumption. In the analysis， we identify two important features on the effects of mortality risk： intertemporal and heterogeneous. We find that China urban households face a common and severe economic fragility. The households whose economic fragility caused by death is above 20% account for more than 65% of all sample households. Household consumption fluctuation plays a more significant role than the averaged decrease of consumption， implying that to hedge mortality risk， insurance is a more effective tool than saving. However， urban households only hold limited life insurance. In the meantime， life insurance held by households plays an effective role in decreasing their economic vulnerability. The effectiveness of life insurance is different over households： for the household with almost three members or with the 35—44 years-old head， it is most effective， but it seems ineffective for the household with female head. Our results show that not only can our analysis effectively measure the impact of mortality risk on household consumption and welfare， but also can provide guide on how to hedge mortality risk for households， which is helpful for policy making.
Key Words： Mortality Risk; Household Consumption and Welfare; Household Economic Fragility; Risk Aversion

Abstract： Benefit equity is one of the principles of the National Medical and Health System Reform Plan. This paper evaluates the benefit equalities of Urban Residents' Basic Medical Insurance (URBMI) which covers more than 250 million urban populations in China. From the theory model， we find that， for the equalized designed social health insurance which is equally financed and reimbursed among the insured， the lower income groups will obtain less reimbursement than higher income groups. In the empirical part， using data from URBMI survey from year 2007 to 2011， we apply the two-part model， and find the similar results with the theoretical prediction of the unequal benefits among income groups. We get conclusion that equalized designed social health insurance would bring benefit equalities for the lower income groups. And the lower income groups are always with poorer health， so such health insurance will also intensify health inequities. Our study provides new evidence on reforming China's health insurance system policies.
Key Words： Equalized Health Insurance; Medical Care Utilization; Benefit Equality; Health Care Reform