In the first quarter of 2026, faculty and students of the School of Economics at Shanghai University of Finance and Economics achieved fruitful academic outputs, publishing more than 20 papers in well-known economic journals at home and abroad. Among these, 13 articles appeared in international Tier‑2 or above economics journals, and 2 in domestic top journals. Below is a summary of major academic achievements and abstracts.
Associate Professor Sun Wei from the Department of Resource and Environmental Economics and co-authors published Saving an old regime with new elites? The unintended effects of co-opting foreign-educated councilors in China in Journal of Development Economics, an international Tier‑1 economics journal.
Saving an old regime with new elites? The unintended effects of co-opting foreign-educated councilors in China
Journal of Development Economics
Volume 178, Jan. 2026
Abstract
How does the co-optation of foreign-educated elites influence local stability? This study exploits a quasi-experimental setting created by the establishment of provincial Consultative Bureaus in China in 1909 to examine the political consequences of integrating Japan-educated returnees into local governance. Using an original, prefecture-by-month panel dataset across 262 prefectures from 1901 to 1911, we find that co-opting foreign-educated elites produced unintended effects: it significantly reduced revolutionary armed struggles (the revolution effect), but simultaneously increased peasant revolts (the revolt effect). Mechanism analysis suggests that returnees advocated reforms that intensified local tax burdens—particularly in economically strained regions—provoking peasant revolts. Our findings underscore a critical trade-off in the modernization efforts of autocratic regimes: when elites' reformist ambitions outpace the adaptive capacity of society, well-intended reforms can generate unintended backlash.
Tenured Associate Professor Hu Gaoji from the Department of Microeconomics and co-author published Coarse Revealed Preference online in Theoretical Economics, an international Tier‑1 economics journal.
Coarse Revealed Preference
Theoretical Economics
Volume 21, Jan. 2026
Abstract
We propose a novel concept of rationalization, called coarse rationalization, tailored for the analysis of datasets where an agent’s choices are imperfectly observed. We characterize those datasets which are rationalizable in this sense and present an efficient algorithm to verify the characterizing condition. We then demonstrate how our results can be applied through a duality approach to test the rationalizability of datasets with perfectly observed choices but imprecisely observed linear budget sets. For datasets that consist of both perfectly observed feasible sets and choices but are inconsistent with perfect rationality, our results could be used to measure the extent to which choices or prices have to be perturbed to recover rationality.
Assistant Professor Gui Shan from the Department of Microeconomics and co-author published Evaluating non-clairvoyant dynamic mechanisms: Theory and experiment in Games and Economic Behavior, an international Tier‑1 economics journal.
Evaluating non-clairvoyant dynamic mechanisms: Theory and experiment
Games and Economic Behavior
Volume 158, June 2026
Abstract
This paper studies the evaluation of non-clairvoyant dynamic mechanisms, where the designer cannot observe future information and must make sequential decisions without perfect foresight. We provide a theoretical framework to assess the performance and robustness of such mechanisms in dynamic environments. We then conduct laboratory experiments to test the theoretical predictions, examining how subjects behave under different dynamic mechanisms. Our results show that non-clairvoyant mechanisms can achieve satisfactory efficiency and stability in practice, and the experimental outcomes are largely consistent with the theoretical implications. The findings offer useful guidance for the design and application of dynamic mechanisms in real-world scenarios.
Tenured Professor He Simin from the Department of Microeconomics and doctoral graduate Zou Xinlu co-authored Responsibility sharing in a public bad experiment, published online in Economic Theory, an international Tier‑2 economics journal.
Responsibility sharing in a public bad experiment
Economic Theory
Online, Mar. 2026
Abstract
We propose a novel mechanism to mitigate the provision of public bads in large groups. In the baseline case with centralized punishment, players choose their neighbors and having more neighbors brings benefits. Each player then decides whether to provide a public bad, which yields personal benefits but imposes costs on the entire group. A small chance exists that a player providing the public bad will be detected and punished. In the responsibility-sharing mechanism, when a player is caught providing the public bad, their neighbors are also punished. Our theoretical analysis and experimental results strongly support the effectiveness of this mechanism in promoting Pareto optimal outcomes. In addition, using another experimental treatment, we determine that the mechanism is less effective in the absence of complete feedback information.
Assistant Professor Zhao Xuan from the Department of Economic History published Early Modern European and Chinese Political Economy, and the Great Divergence online in History of Political Economy, an international Tier‑2 economics journal.
Early Modern European and Chinese Political Economy, and the Great Divergence
History of Political Economy
Volume 58, Issue 3, Feb. 2026
Abstract
This article studies the comparison between mercantilism and orthodox Confucianism, two kinds of political economy which respectively dominated many important European countries and China in the early modern period. This article finds that mercantilism was industrialistic, proluxury, and pro‑innovation, whereas orthodox Confucianism was physiocratic, antiluxury, and anti‑innovation. Interpreting such distinction with the modern theories of increasing and decreasing returns, this article finds that mercantilism advocated an increasing‑return strategy of economic development, but orthodox Confucianism insisted upon the economic path of decreasing returns. This article believes that such distinction can be added as a parameter to the discussion about the Great Divergence, because, as the Great Divergence was driven by the divergence between the behaviors of early modern European and Chinese states, this article presents that such divergence between the behaviors of states happened in the context of the divergence between the political economy that guided the behaviors of states.
Assistant Professor Wu Ruike from the Department of Econometrics and co-author published Adaptive LAD-Based Bootstrap Unit Root Tests under Unconditional Heteroskedasticity online in Journal of Business & Economic Statistics, an international Tier‑2 economics journal.
Adaptive LAD-Based Bootstrap Unit Root Tests under Unconditional Heteroskedasticity
Journal of Business & Economic Statistics
Online, Mar. 2026
Abstract
This paper explores testing unit roots based on least absolute deviations (LAD) regression under unconditional heteroskedasticity. We first derive the asymptotic properties of the LAD estimator for a first-order autoregressive process with the coefficient (local to) unity under unconditional heteroskedasticity and weak dependence, revealing that the limiting distribution of the LAD estimator (consequently the derived test statistics) is closely associated with unknown time-varying variances. To conduct feasible LAD-based unit root tests under heteroskedasticity and serial dependence, we develop an adaptive block bootstrap procedure, which accommodates time-varying volatility and serial dependence, both of unknown forms, to compute critical values for LAD-based tests. The asymptotic validity is established. We then extend the testing procedure to allow for deterministic components. Simulation results indicate that, in the presence of unconditional heteroskedasticity and serial dependence, the classic LAD-based tests demonstrate severe size distortion, whereas the proposed LAD-based bootstrap tests exhibit good size-control capability. Additionally, the newly developed tests show superior testing power in heavy-tailed distributed cases compared to considered benchmarks. Finally, empirical analysis of real effective exchange rates of 16 EU countries is conducted to illustrate the applicability of the newly proposed tests.
Assistant Researcher Zhang Huili from the Department of Labor Economics and co-author published Education, desired fertility, and HIV/AIDS: Evidence from China’s compulsory schooling law in Journal of Comparative Economics, an international Tier‑2 economics journal.
Education, desired fertility, and HIV/AIDS: Evidence from China’s compulsory schooling law
Journal of Comparative Economics
Volume 54, Mar. 2026
Abstract
We investigate the impact of education on stemming human immunodeficiency virus/acquired immunodeficiency syndrome (HIV/AIDS) infection. Using China’s Compulsory Schooling Law (CSL) as a quasi-natural experiment, we find that mass education significantly enhances knowledge about HIV/AIDS, and that each additional year of exposure to the CSL reduces HIV/AIDS contraction and mortality rates by 6.51% and 2.15%, respectively. Further analyses suggest that these reductions are primarily driven by a reduction in blood-borne transmission. In contrast, the effect of CSL on sexual transmission is ambiguous. Drawing on detailed data on individuals’ sexual behaviors and attitudes toward sex and fertility, we find that the CSL significantly lowers women’s desired fertility without affecting that of men. Consequently, women become the more active contraception seekers within households, leading to a substitution of female-controlled contraceptive methods for condoms. This behavioral shift may increase the risk of sexually transmitted infections, potentially offsetting or even muting the CSL’s positive effect on reducing the sexual transmission of HIV/AIDS.
Professor Chen Qiang from the Department of Econometrics and doctoral student Song Xinyi co-authored Crash Risk Matters: An Option-Implied Approach to the Expected Market Return, published in Journal of Futures Markets, an international Tier‑2 finance journal.
Crash Risk Matters: An Option-Implied Approach to the Expected Market Return
Journal of Futures Markets
Volume 46, Mar. 2026
Abstract
This study introduces a lower bound that integrates the market's simple return risk-neutral variance and a combination of log-return moments to predict market log returns. A distinctive feature of the model is that the ratio of to captures crash risk, and the lower bound of log returns depends on the joint effect of crash risk and risk-neutral variance. Our in-sample analysis shows that crash risk exhibits significant predictive power for market returns, and its marginal effect differs markedly between crisis and noncrisis periods. In out-of-sample testing, we argue that crash risk outperforms several benchmarks in return prediction, while the joint effects of crash risk and variance risk achieves higher accuracy in forecasting crash events. We further demonstrate that our model delivers superior performance when the risk aversion is high, particularly during periods of crises.
Professor Chen Qiang from the Department of Econometrics, doctoral student Jiang Zeyu, and doctoral student Li Yike from the Department of Macroeconomics co-authored Shadow Banking, Structural Monetary Policy and Optimal Capital Regulation Policy, published in China Economic Quarterly, a domestic Class‑A authoritative journal.
Shadow Banking, Structural Monetary Policy and Optimal Capital Regulation Policy
China Economic Quarterly
Vol. 26, Issue 1, 2026
Abstract
Within a New Keynesian framework, this paper incorporates sectorally heterogeneous financing constraints and shadow banking with default risk to study how shadow banking shapes the effectiveness of structural monetary policy, as well as the optimal coordination between structural monetary policy and commercial bank capital regulation. We find that shadow banking amplifies the ability of structural monetary policy to optimize banks’ credit allocation. During economic downturns, the optimal policy mix implements countercyclical adjustments targeting respective objectives. During economic booms, optimal capital regulation switches to procyclical adjustment to leverage shadow banking for strengthening structural monetary policy outcomes.
Professor Zhang Zhenyu from the Department of Econometrics, doctoral student Chen Haowen, and Assistant Researcher Lang Xuhua from the Department of Political Economy co-authored Causal Inference for Common Prosperity, published in Economic Review, a domestic Class‑B authoritative journal.
Causal Inference for Common Prosperity
Economic Review
Issue 1, 2026
Abstract
Common prosperity is an essential requirement of socialism. Integrating it with causal inference represents an important fusion of practices with Chinese characteristics and modern econometric methods. Based on the evolution and latest advances of causal inference theory, this paper systematically explains the necessity and feasible pathways to build a causal inference framework tailored for common prosperity research. We argue that causal inference has evolved from average treatment effects, heterogeneous effects to innovations empowered by digital and intelligent technologies, yet conventional methods still face limitations when addressing today’s complex high-dimensional common prosperity issues. Theories of causal inference and the study of common prosperity share methodological compatibility, research extensibility and innovative potential. Going forward, scholars should stimulate theoretical breakthroughs in causal inference through common prosperity research, deploy heterogeneous causal inference to uncover new theoretical insights on common prosperity, and advance digital-intelligent causal inference for common prosperity. This paper explores how to promote methodological innovation in economics by engaging with China’s real-world issues. It hopes to inform the development of causal inference theories with Chinese characteristics and support the construction and global dissemination of China’s independent knowledge system in economics.
The School of Economics at Shanghai University of Finance and Economics consistently regards the enhancement of research and innovation capacity as a core driver of disciplinary development. Adhering to the standards for world-class discipline development and drawing on accumulated resources and experience from years of teaching reform, faculty members uphold an academic orientation rooted in China’s realities while embracing global perspectives. They keep pushing the frontier of research, underpinning the comprehensive lift of the school’s academic competitiveness and disciplinary development.
