Growing like China revisit : a quantitative analysis during 1998 -- 2015

The growth pattern of the Chinese economy since 1990s is very controversial: the high output growth is accompanied by sustained increases in returns on capital, investment rates, and saving rates. Song et al. (2011) have proposed a theory of economic transition which can comprehensively explain Chin...

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Main Authors: Long, Haiyan, Peng, Yudan, Ren, Jiayi
Other Authors: Tang Yang
Format: Final Year Project
Language:English
Published: 2017
Subjects:
Online Access:http://hdl.handle.net/10356/70413
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Institution: Nanyang Technological University
Language: English
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spelling sg-ntu-dr.10356-704132019-12-10T13:42:14Z Growing like China revisit : a quantitative analysis during 1998 -- 2015 Long, Haiyan Peng, Yudan Ren, Jiayi Tang Yang School of Humanities and Social Sciences DRNTU::Social sciences The growth pattern of the Chinese economy since 1990s is very controversial: the high output growth is accompanied by sustained increases in returns on capital, investment rates, and saving rates. Song et al. (2011) have proposed a theory of economic transition which can comprehensively explain Chinese experience from 1992 to 2007. But from 2008 onwards, due to the global recession and financial crisis, the Chinese economy has experienced tremendous changes including government’s four-trillion-Yuan stimulus package, the reform of state-owned firms and the revolution in the capital market. Therefore, we modify Song’s model to mimic China’s economic development until 2015. The private firms operated by entrepreneurs are more productive, but the financial imperfections force them to rely on internal savings to raise capital. State-owned firms with low-productivity depend on their superiority in the financial market to remain in the game. As the financial market in China becomes more developed, financial frictions gradually decrease; meanwhile, the continuous growth of the saving rate increases entrepreneurial firms’ capital stock and relaxes the limits of the high-productivity firms’ growth. While the calibrated model, in general, captures the features of the Chinese economy, it no longer matches as perfectly as before. This is likely due to the government intervention, housing bubble, foreign direct investments and overseas investments. Bachelor of Arts 2017-04-24T03:19:40Z 2017-04-24T03:19:40Z 2017 Final Year Project (FYP) http://hdl.handle.net/10356/70413 en Nanyang Technological University 52 p. application/pdf
institution Nanyang Technological University
building NTU Library
country Singapore
collection DR-NTU
language English
topic DRNTU::Social sciences
spellingShingle DRNTU::Social sciences
Long, Haiyan
Peng, Yudan
Ren, Jiayi
Growing like China revisit : a quantitative analysis during 1998 -- 2015
description The growth pattern of the Chinese economy since 1990s is very controversial: the high output growth is accompanied by sustained increases in returns on capital, investment rates, and saving rates. Song et al. (2011) have proposed a theory of economic transition which can comprehensively explain Chinese experience from 1992 to 2007. But from 2008 onwards, due to the global recession and financial crisis, the Chinese economy has experienced tremendous changes including government’s four-trillion-Yuan stimulus package, the reform of state-owned firms and the revolution in the capital market. Therefore, we modify Song’s model to mimic China’s economic development until 2015. The private firms operated by entrepreneurs are more productive, but the financial imperfections force them to rely on internal savings to raise capital. State-owned firms with low-productivity depend on their superiority in the financial market to remain in the game. As the financial market in China becomes more developed, financial frictions gradually decrease; meanwhile, the continuous growth of the saving rate increases entrepreneurial firms’ capital stock and relaxes the limits of the high-productivity firms’ growth. While the calibrated model, in general, captures the features of the Chinese economy, it no longer matches as perfectly as before. This is likely due to the government intervention, housing bubble, foreign direct investments and overseas investments.
author2 Tang Yang
author_facet Tang Yang
Long, Haiyan
Peng, Yudan
Ren, Jiayi
format Final Year Project
author Long, Haiyan
Peng, Yudan
Ren, Jiayi
author_sort Long, Haiyan
title Growing like China revisit : a quantitative analysis during 1998 -- 2015
title_short Growing like China revisit : a quantitative analysis during 1998 -- 2015
title_full Growing like China revisit : a quantitative analysis during 1998 -- 2015
title_fullStr Growing like China revisit : a quantitative analysis during 1998 -- 2015
title_full_unstemmed Growing like China revisit : a quantitative analysis during 1998 -- 2015
title_sort growing like china revisit : a quantitative analysis during 1998 -- 2015
publishDate 2017
url http://hdl.handle.net/10356/70413
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