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This paper shows that increasing government social expenditures can make a substantive contribution to increasing household consumption in China. The paper first undertakes an empirical study of the relationship between the savings rate and social expenditures for a panel of OECD countries and provides illustrative estimates of their implications for China. It then applies a generational accounting framework to Chinese household income survey data. This analysis suggests that a sustained 1 percent of GDP increase in public expenditures, distributed equally across education, health, and pensions, would result in a permanent increase the household consumption ratio of 1¼ percentage points of GDP.

Cost and standard of living --- Public welfare --- Government spending policy --- Finance. --- China --- Social policy. --- Economic policy. --- Expenditures, Public --- Public spending policy --- Spending policy, Government --- Economic policy --- Finance, Public --- Full employment policies --- Unfunded mandates --- Benevolent institutions --- Poor relief --- Public assistance --- Public charities --- Public relief --- Public welfare reform --- Relief (Aid) --- Social welfare --- Welfare (Public assistance) --- Welfare reform --- Human services --- Social service --- Government policy --- Macroeconomics --- Public Finance --- Aggregate Factor Income Distribution --- Macroeconomics: Consumption --- Saving --- Wealth --- Urban, Rural, and Regional Economics: Household Analysis: General --- National Government Expenditures and Related Policies: General --- National Government Expenditures and Health --- Public finance & taxation --- Income --- Consumption --- Household consumption --- Expenditure --- Health care spending --- Economics --- China, People's Republic of

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In response to the global financial crisis, governments provided substantial support to the financial and other key sectors. Although this cushioned the adverse effects of the crisis, it is necessary now to articulate a strategy to ensure the sustainability of public finances. This paper discusses the scale and composition of fiscal adjustment that will need to occur once the recovery is securely under way. Although specific country-level circumstances will influence the composition of the adjustment and its political feasibility, in many cases restoring fiscal sustainability will require reforms to reduce spending and increase tax revenue.

Fiscal policy. --- Structural adjustment (Economic policy) --- Debts, Public. --- Government spending policy. --- Budget. --- Financial crises --- Global Financial Crisis, 2008-2009. --- Government policy. --- Global Economic Crisis, 2008-2009 --- Subprime Mortgage Crisis, 2008-2009 --- Crashes, Financial --- Crises, Financial --- Financial crashes --- Financial panics --- Panics (Finance) --- Stock exchange crashes --- Stock market panics --- Crises --- Budgeting --- Expenditures, Public --- Finance, Public --- Public spending policy --- Spending policy, Government --- Economic policy --- Full employment policies --- Unfunded mandates --- Debts, Government --- Government debts --- National debts --- Public debt --- Public debts --- Sovereign debt --- Debt --- Bonds --- Deficit financing --- Tax policy --- Taxation --- Forecasting --- Government policy --- Macroeconomics --- Public Finance --- Debt Management --- Sovereign Debt --- Fiscal Policy --- Social Security and Public Pensions --- Public finance & taxation --- Pensions --- Fiscal stance --- Fiscal consolidation --- Domestic debt --- Pension spending --- Fiscal policy --- Expenditure --- Debts, Public --- Japan