Speaker:Huachen Li, Associate Professor (Kenyon College)

Host:Lan Lan, Assistant Professor (Li Anmin Institute of Economic Research, Liaoning University)

Guest:Li Yu, Assistant Professor (Li Anmin Institute of Economic Research, Liaoning University)

Time:14:00–15:30 (Beijing Time), Thursday, May 14, 2026

Location:Room 483, Economics Building, Puhe Campus, Liaoning University

Online Access:Tencent Meeting 730-281-8924

Language:Chinese/English

Abstract:

This paper constructs a new quarterly measure of fiscal policy uncertainty (FPU) for China from 1995Q1 to 2025Q2 by estimating a fiscal reaction function with time varying volatility. In a structural VAR with time-varying parameters and stochastic volatility, FPU shocks persistently lower real activity, consumer confidence, and equity returns, and account for a meaningful share of macroeconomic fluctuations. The positive short-run effect of an expansionary fiscal shock largely disappears once the uncertainty that historically accompanies fiscal intervention is taken into account, except during episodes of severe stress. A calibrated central–local fiscal model rationalizes these results through an uncertainty channel that operates via financing, local implementation, and future fiscal adjustment.

Speaker Profile:

Huachen Li is an Associate Professor at Kenyon College, USA. He holds a Ph.D. in Economics from North Carolina State University, USA. His research fields include macroeconomics and applied time series. His research has been published in international journals such as the Journal of Money, Credit and Banking and Macroeconomic Dynamics.