This article comes from the Gelonghui column: CICC Research, author: Duan Yuzhu and Zhang Wenlang
We have reviewed the four rounds of consumer goods subsidy policies in history, estimated the fiscal scale of each round of policies, and designed a calculation framework for the fiscal multiplier to estimate the current multiplier of each round of subsidy policies and the cumulative multiplier within two years after the policy is withdrawn. Our calculations show that the current multiplier of fiscal subsidies is high, and has a strong driving force on related consumption. Subsequently, due to the overdraft effect, the cumulative multiplier will gradually drop below .
The multiplier of consumer subsidies has tended to decline in the ivory coast phone number list past few rounds, and the increase in product retention rate may affect the policy effectiveness. Generally speaking, goods with more expensive unit prices have higher current fiscal multipliers and lower longterm multipliers for example, comparing cars and home appliances.
Our estimates show that subsidies for oldfornew exchanges may exceed billion yuan in the fourth quarter of , with a fiscal multiplier of around .. The expansion of the oldfornew program in is likely to surpass to become the year with the highest intensity of consumer goods subsidies, or it may provide a significant boost to total retail sales.
Historically, my country has introduced four rounds of consumer product subsidies including tax reductions and exemptions policies. The oldfornew subsidy is the most intense policy in the past years. In , , and , when durable goods consumption declined, my country introduced measures to promote consumption and stabilize growth.