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《Journal of Beijing University of Aeronautics and Astronautics(Social Sciences Edition)》 2008-01
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The Empirical Test of Fiscal Illusion Hypothesis

WEN Juan,SHEN Ying-chun(School of Public Administration,Beijing University of Aeronautics and Astronautics,Beijing 100083,China)  
The Fiscal Illusion Hypothesis is one of the theories explaining the increase of government size under the Public Choice Theory.Based on the empirical equation of Fiscal Illusion Hypothesis,the "Fiscal Illusion" was separated into "Deficit Illusion" and "Expectation Illusion".Using the annual data of China from 1978 to 2004,the relationship between the "Fiscal Illusion" and the increase of government size was demonstrated with the Chow Turning Point test,integration analysis and vector error correction model.It was found that the "Fiscal Illusion" was one reason of the increase of China's government size.The existence of the "Deficit Illusion" was not confirmed remarkably,but the "Expectation Illusion" has a positive effect on the increase of government size.
【CateGory Index】: F810
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