Speaker: Liu Fengqi, Associate Professor, PhD in Economics (Postdoctoral), School of Economics, Nankai University
Host: Xie Cong, Assistant Professor (China Institute of Economics, Liaoning University)
Guest Introduction: Hou Shangdi, Assistant Professor (China Institute of Economics, Liaoning University)
Lecture Time: 10:00-11:30 a.m. (Beijing Time), Friday, October 24, 2025
Venue: Conference Room on the 1st Floor, Wuzhou Garden, Chongshan Campus, Liaoning University
Online Access: Tencent Meeting ID: 471-691-522
Abstract:We study the effects of government spending shocks on real and nominal variables. Empirically, an unanticipated increase in government spending raises private consumption and real wages, while lowering inflation and markups. Utilization-adjusted total factor productivity exhibits either a decline or no significant response, suggesting that TFP-based channels are not the primary drivers. To interpret these findings, we estimate a New Keynesian DSGE model that incorporates social comparison in consumption (Keeping Up with the Joneses, KUJ) and deep habits (DH). KUJ preferences are necessary to generate the positive consumption response, while DH is required to obtain falling markups and inflation alongside rising real wages. Neither mechanism alone accounts for the full set of empirical results, but their joint presence allows the model to reproduce both the fiscal quantity and price puzzles. The results emphasize the role of consumer preference structures in shaping the transmission of fiscal policy.
Speaker Profile
Liu Fengqi is an Associate Professor, PhD in Economics (Postdoctoral) at the School of Economics, Nankai University. His research focuses on fiscal theory and policy, as well as macroeconomic fluctuations.
He has published papers in journals including Economic Research Journal, Management World, China Economic Quarterly, and Review of Economic Dynamics. Many of his papers have been fully reprinted in Xinhua Digest and Renmin University Copy Materials.
He currently presides over the Youth Project of the National Natural Science Foundation of China, a sub-project of the Key Project of the National Natural Science Foundation of China, and the Special Funding Project of the China Postdoctoral Science Foundation.
