Abstract：This paper firstly studies the old and new normal of the global economy based on the perspective of long cycle. Then the paper discusses the structural deceleration of Chinese economy and its new challenges. The new normal that reveals the bright vision of escaping the middle income trap and moving up to the new development level needs to be guided by building up the innovation-driven engine， the decisive role of market in the structural adjustment， the new pattern of full advancement of opening up， achieving economic growth through ecological environment improvement， and realizing the inclusive growth. The authors finally confirm the basic conclusions of the paper by the analysis on the new normal of Chinese economy in 2014.
Key Words：New Normal； Long Cycle； Big Logic； Guidance
JEL Classification：O10， O11， O20

Abstract：Vertical specialization(VS) plays an important role in global value chain. Countries involved in VS can enjoy benefits from VS greatly， but also be vulnerable to external shocks. The paper decomposes fluctuations of VS (44 countries from 1996 to 2010) in the global value chain at the level of intensive-extensive margins， dropping those factors unrelated to VS. The results of country-level and industry-level analyses show VS fluctuations facilitate the transmission of leading countries' internal fluctuations outwards， and block external shocks. However， those followers share external shocks through VS， while internal fluctuations of followers cannot be spread outside. In addition， in-advance adjustments of leaders' extensive margins in VS can affect followers in sharing external shocks through VS.
Key Words：Vertical Specialization；Intensive Margins；Extensive Margins；Synchronization
JEL Classification：F15， F14， F43

Abstract：By constructing, estimating, calibrating and simulating of the two-country DSGE model, this Paper analyzes the formation mechanism of equilibrium exchange rate and interest rate and the main reasons of disequilibrium were happened. Base on model simulation， the main conclusions include： firstly， in closed or small open economy， with foreign interest rate is considered as exogenous variable， domestic interest rate and exchange rate achieve equilibrium at the same time. When exchange rate deviates from its equilibrium level， domestic interest rate would miss its equilibrium level as well， and vice versa. The pressure of domestic interest rate increasing and currency appreciation appears simultaneously. It suggests that when analyzing equilibrium exchange rate and interest rate， the relations between exchange rate and interest rate have to be taken into account.Through the domestic interest rate and exchange rate policy coordination， achieve domestic interest rate and exchange rate equilibrium simultaneously. Secondly， under international monetary environment， whether exchange rate will achieve its equilibrium level is not only associates with the state of domestic interest rate， but also relates to the state of foreign interest rate. When foreign interest rate imbalance， and there is lack of coordination and cooperation mechanisms between the two country's monetary policy， the domestic interest rate and exchange rate equilibrium will become an impossible task. Thirdly， for the optimal path adjustment of exchange rate and interest rate imbalances， the model suggests that it should adjust the one which has more disequilibrium than the other.
Key Words：Equilibrium Exchange Rate； Equilibrium Interest Rate； Monetary Policy
JEL Classification：E47， E52， F20

Abstract：The paper investigates the overall effects of market entry on economic growth and provides a microscopic interpretation of the economic growth process and mechanism in China from the perspective of dynamic resource reallocation. Using the manufacturing firms' data in China from 1998 to 2007， the paper conducts an empirical analysis on the growth effect of market entry. The results find that market entry is active in the Chinese manufacturing industry and the industries with higher entry grow faster. Although new entrants only contribute 7.5% to total value added for the manufacturing， the average contribution to economic growth is as high as 46.3%. New entrants grow faster than that of other enterprises in the post entry periods， but the slowing down growth rate convergences to the incumbent firms' pace of growth. The last but not the least， the paper uses econometric model to identify the micro mechanism that entrants promote the Chinese economic growth. The results find that market selection and learning effects are all important mechanisms to promote economic growth in China.
Key Words：Market Entry； Economic Growth； Chinese Manufacturing Industry
JEL Classification：F11， F12， H54

Abstract：This paper studies the impact of misallocation on total factor productivity (TFP) from intensive perspective. On the one hand， factor market wedges not only directly reduces TFP through distorting efficiency of resource allocation among exiting firms， but also changes firm's entry and exit behavior through markup and indirectly reduces TFP. Empirical results based on the Annual Survey of Industrial Firms in China during 1998—2007 show that， if we can eliminate capital market distortion， TFP in the manufacturing sector can increase 57.79% which direct effect is 31.46% and indirect effect is 26.32%. If we can eliminate labor market distortion， TFP in the manufacturing sector can increase 33.12% which direct effect is 11.42% and indirect effect is 21.69%. At the end， we check different effect related to labor incomes share， state-owned enterprises and firms size. And our result is robust.
Key Words：Resource Misallocation; Total Factor Productivity; Markup; Entry and Exit Behavior
JEL Classification：D24，L12，O12，O47

Abstract：This paper defines possible influences of geography on dividend policy as “substitute model” and “outcome model”， and figures out the influential mechanism from the perspective of financial flexibility and growth opportunity for the first time， which clarifies the analysis framework when discussing geographic influences on dividend policy. Our empirical results consistently support the “outcome model”. It indicates that， companies who are in remote places are facing higher level of external financial constraint because of higher level of information asymmetry， which makes them depend more on debt financing， and get less spare debt capacity as a result. Hence， compared to companies located in central places， remote firms， especially for those with higher growth opportunity， will have higher needs for financial flexibility， which finally leads to their lower payout.
Key Words：Geography； Information Asymmetry； Financial Flexibility； Dividend Policy
JEL Classification：G30，D82， G32， G35

Abstract：The private enterprise， as a principal part of economic activity， plays an essential role in economic growth as it has contributed about 60% to the GDP and accounted for about 50% of urban employment. Based on the data from the China Household Finance Survey (CHFS)， this paper makes analyzes the relationship between the public servant backgrounds and the entrepreneurial energies of families. It is found that， the official background of a public servant's family may result in a significant increase of 3.5% in the probability of starting an undertaking by the spouse of a male public servant who has gotten a position， or an even more significant increase of 10.3% for couples in the exact opposite situation. Furthermore， no satisfactory reason could be found for the higher entrepreneurial energy of a family with its member taking an official position based upon the financing conveniences， high level of human capital or more extensive social network derived from such public servant background. In the case of controlling the characteristic variables of enterprises， the return on venture capital of a family with its member taking an official position is more above the average profit level. Additionally， with the experiment that the government made to put forth more efforts to fight corruption after the 18th CPC National Congress， it is found that the entrepreneurial energy in a household with members in official positions has significantly decreased by 3.2% from 2011 to 2013. The rent-seeking motive， therefore， may be the real cause of a household with members in official positions having higher entrepreneurial activity.
Key Words：Family Background of Civil Servants； Entrepreneurship； Rent-seeking
JEL Classification：A14

Abstract：The traditional researches usually ignore the impact of endogenous incentive on operation independent enterprises' efficiency when government's inference is indirect. We build up an incentive based firms competition model to review the firms' behavior and action strategy based on the indirect influence mechanism between political connection and political burden. Based on our model， due to government's rent-setting behavior， firms' optimal strategy is to volunteer to take the political burden and form the political connection， and the model rectifies and extends the classic soft budget constraint theory and reveals mechanism of the current renewal phenomenon correctly. We also find that although consumer surplus will increase but the total welfare is lower than first best welfare based on the incentive distortion and what's more the distortion will not be rectified by perfect competition environment， the bonus of opening-up will vanish. So we think suppress government indirect inference and the privilege of rent-setting is the key to improve enterprises' efficiency and the direction to reform.
Key Words：Enterprise Efficiency； Endogenous Incentive； Political Connection Utility； Market Liberation； Soft Budget Constraint
JEL Classification：L21， D21， G38

Abstract：Taking demographic changes to make research on real estate market trends has been regarded as a basic method on assessing housing demand. On this basis， this paper uses panel data and GWR model to investigate comprehensively about influencing factor， spatial and temporal effects as well as the overall trend of Chinese urban housing demand. As a result， it found that the number of cities' residents and migrants， income distribution， human capital and the population dependency ratio have significant impact on China's urban housing demand. In perspective of temporal and spatial variation of explanatory variables， it can be seen that the importance of demographic factors have been dramatically strengthened. Furthermore， heterogeneous studies by regions reveal that demographic contradiction becomes more prominent in the developed cities and regions， and it also presents an obvious spatial mismatch pattern. Based on the forecast， China's urban housing demand will show an overall trend of “up-steady-down” like “inverted U” style during 2015—2030. Meanwhile， China's urban housing demand will no longer present a rapid increase trend after 2025. Therefore， the future goals of comprehensive reform in China's housing system should focus on reining in house prices rising too fast by investment and speculative demand in current and next decade. On the other hand， we may have a warning to the “mushroom cloud” risks of demographics which will probably occur after 2025.
Key Words：Demographics； Housing Demand； Population Dependency Ratio； GWR Model
JEL Classification：J11， R21， R23

Abstract：This paper analyzes the dual economy model by Lewis according to the idea of social product reproduction and its realization. The presumption of constant wage in Lewis model is falsified in the closed and open economy respectively by considering the product market. This study finds that the proposition of Lewis that the real labor wage could raise evidently only when the dual economy has passed the “Lewis turning point” cannot stand whether in the condition of closed economy or open economy， as Lewis ignored the analysis of products but only focused on the labor market. In the long term of economic growth， whether it is single or dual economy， the labor wage should raise as long as the labor productivity increases.
Key Words：Dual Economy Transition； Lewis Turning Point； Assumption of Constant Wage
JEL Classification：B12， E10， E20

Abstract：This paper aims to clarify the best methodology for the mainstream economics of post crisis era， based on the comparative analysis of methodological evolution. The author argues that， comtean positivism， logical positivism， the current mainstream of logic empiricism and falsificationism can't provide convincing defense for the theoretical system of mainstream economics. In comparison， Keynesian positive method based on Millian tradition born in the early of new classical economics， not only can still provide the best defense for the mainstream economics， but also can overcome some shortcomings of the current mainstream economics methodology， and can reconcile with the latter by distinguishing specific research and abstract research. Therefore， Keynesian positive method based on Millian tradition is still a feasible guidance for current economics research.
Key Words：Positive Economics； Economic Methodology； Millian Tradition； Keynesian Positive Method； Positivism
JEL Classification：B40