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FEC Articles Express: 2017 December Issue
December 12, 2017
Frontiers of Economics in China (FEC)

Lihui Wang, Junyi Shen
Examining the Factors Affecting Personal Income: An Empirical Study Based on Survey Data in Chinese Cities

Dongsheng Di, Warren Coats, Yuxuan Zhao
Why does the World Need a Reserve Asset with a Hard Anchor?

Marlies Schütz, Han Li, Nicole Palan
Are Central and Western Chinese Provinces Catching up with the East? An Empirical Analysis of Convergence Processes across China

Ying Chu Ng, Suthathip Yaisawarng
Can a Government Initiate Enterprise Reform to Improve Efficiency? A Cross-Section Analysis of the Chinese Pharmaceutical Industry

Shiqiang Li
Decision Making and Ability: An Explanation of Elitism in China’s Government

Yu Chen, Haiwen Zhou
An Overlapping-Generations Model of Firm Heterogeneity in Economic Development 

Lihui Wang
Graduate School of Economics, Kobe University
Junyi Shen
Research Institute for Economics and Business Administration, Kobe University
School of Economics, Shanghai University

Abstract: This paper empirically analyzes the factors affecting personal income in urban China using survey data of the “Preference and Life Satisfaction Survey” conducted by the Global COE project of Osaka University from 2009 to 2013. We consider education level as an endogenous variable, and both ordinary least squares (OLS) regression and instrumental variable (IV) regression are performed. We find a number of factors, such as sex, age, education, and marriage that significantly affect personal income. In addition, differences between different occupations are also investigated.

Dongsheng Di
School of International Studies, Renmin University of China &
a research fellow with International Monetary Institute of Renmin University of China
Warren Coats
Former chief of the SDR Division of the Finance Department, IMF
Yuxuan Zhao
Agriculture Global Practice, International Bank for Reconstruction and Development (IBRD)

Abstract: From the 1970s, the global currency system has two features: the use of one or a few sovereign currencies as the global reserve asset and the floating exchange rate regime between major currencies. This paper points out that the costs of the dollar’s use as an international reserve currency exceed the benefits for both the US and the rest of the world. These costs include the exporting of American manufacturing as a byproduct of its current account deficit needed to supply its currency to the rest of the world. In addition to the detriment to trade from unpredictable exchange rate fluctuations, the termination of the U.S. obligation to redeem its currency for gold also removed an important restraint on deficit financing for the US and many other countries in the short-run, thus promoting excessive leverage that was a major contributor to the 2008 financial crisis. The paper suggests replacing several main countries’ currencies in international reserves with a real Special Drawing Right (SDR) issued according to currency board rules.

About the journal:

Frontiers of Economics in China (FEC) is a quarterly peer-reviewed journal edited by Institute for Advanced Research, Shanghai University of Finance and Economics, and published by Higher Education Press.  Established in 2006 and with Guoqiang Tian as the Editor, the journal has a strong Editorial Advisory Board (with several Nobel Prize winners as board members), as well as a dedicated Co-Editors’ team and an Editorial Board comprised of leading overseas and domestic Chinese economists.

Issued quarterly and distributed worldwide, the FEC is available both online and in hard-copy.  With more than 600 institutional subscribers worldwide and indexed in more than 10 databases including ESCI, EconLit, RePEc and SCOPUS, the journal was ranked as one of “The Highest International Impact Academic Journals of China” in 2016.

The FEC welcomes submissions of theoretical and empirical papers from all fields of economics, particularly those with an emphasis on the Chinese economy and other emerging, developing or transition economies.  While the journal is primarily interested in original research papers, it also welcomes submissions of opinion articles, literature surveys, and book reviews.  Full-text papers are free for download at:

Editor: Guoqiang Tian, Texas A&M University; Shanghai University of Finance and Economics
Executive Editor: Zhiqi Chen, Carleton University
Chunrong Ai, University of Florida
Kevin X.D. Huang, Vanderbilt University
Neng Wang, Columbia University
James Wen, Trinity College, USA

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