Assistant Research Fellow Liu Fengqi: Two Papers on Behavioral Economics and Fiscal Policy

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(Correspondent: Wang Tianjian) Recently, Assistant Research Fellow Liu Fengqi of Department of Public Finance published two papers in Journal of Management World and Economics Letters respectively.

Liu Fengqi published a paper named “Study on the Impact and Measurement of Psychological Factors between Government and Market in Journal of Management World, 3rd issue of 2023. The co-authors are Professor Hong Yongmiao from University of Chinese Academy of Sciences and Professor Xue Jianpo from Xiamen University. The relationship between government and market is not only a long-lasting debate in economics, but also the core issue of the Socialist market economy with Chinese characteristics.This paper proposes a research agenda of using artificial intelligence, especially machine learning methods, to extract the information of policy changes and various economic entities' reactions afterwards from massive unstructured data. It analyzes the interaction between economic policies and economic entities from both theoretical and empirical aspects, and then it investigates how the psychological factors of economic entities affect the economic outcome and policy impacts. It also discusses the development of unstructured big data econometrics. Finally, it promotes the formation of an empirical research paradigm that analyzes the economic entities' psychological factors and their impacts in the context of government economic policies, so as to conduct in-depth research on the relationship between government and market.

Lius another paper Keeping up with the Joneses and the Consumption Response to Government Spending was published in Economics Letters, Volume 220, 2022. It is co-authored with Professor Huang Xiaodong from Vanderbilt University, Professor Meng Qinglai from Oregon State University and Professor Xue Jianpo from Xiamen University. Empirical evidence shows that government spending can crowd into private consumption effectively, but traditional macroeconomic models cannot fit the above stylized facts. This paper incorporates psychological factors of the Keeping up with the Joneses” (KUJ) effect into the traditional macro model, and puts forward a new mechanism of how government expenditure crowds into private consumption.

Liu Fengqi graduated and got his doctoral degree in economics from Paula and Gregory Chow Institute for Studies in Economics, Xiamen University in 2022. He joined the Department of Public Finance of School of Economics, Nankai University in the same year.

Journal of Management World is an academic journal sponsored by the Development Research Center of the State Council. Founded in 1985, it is now recognized by universities and research institutions as the top economic and management journal in China. Economics Letters is a widely recognized excellent SSCI journal in the field of economics.