A Real Model of Transitional Growth and Competitiveness in China / Leslie Lipschitz, Geneviève Verdier, Celine Rochon.

Format:

Book

Government document

Author/Creator:

Lipschitz, Leslie.

Contributor:

Rochon, Celine.

Verdier, Geneviève.

IMF Institute.

International Monetary Fund.

Series:

IMF Working Papers; Working Paper ; No. 2008/099

IMF Working Papers

Language:

English

Subjects (All):

Economic development--China--Econometric models.

Economic development.

Investments, Foreign--China--Econometric models.

Investments, Foreign.

China--Economic conditions--Econometric models.

China.

China--Economic policy--Econometric models.

Physical Description:

1 online resource (36 p.)

Edition:

1st ed.

Place of Publication:

Washington, D.C. : International Monetary Fund, 2008.

Language Note:

English

Summary:

We present a stylized real model of the Chinese economy with the objective of explaining two features: (1) domestic production is highly competitive in the sense that an accumulation of capital that raises the marginal product of labor elicits increases in employment and output rather than only in wages; and (2) even though the domestic saving rate is high, foreign direct investment is also substantial. We explain these features in terms of a conventional neoclassical growth model-with no monetary or nominal exchange rate policy-by including two aspects of the economy explicitly in the model: (1) low production wages are sustained by a large reserve army of rural labor which drives internal migration, and (2) domestic capital is distinct from importable capital and complementary with it in production. The results suggest that underlying real phenomena are important in explaining recent history; while nominal renmimbi appreciation may dampen price and wage increases, it would probably not change the real factors that have sustained rapid growth.

Contents:

Contents; I. Introduction; II. Stylized Facts; III. Model; A. Households; B. Firms; C. Exogenous Shocks; D. Equilibrium; IV. Results; A. Calibration; B. Impulse Response Functions; C. Simulation; D. Transition to Steady State; V. Conclusion; Tables; 1. National Saving Rate, 2006; 2. Relative Hourly Wage in Manufacturing, Selected Economies, 2002; 3. Income of Urban and Rural Households and the Urban-Rural Gap (RMB); 4. Summary Indicators of Saving and Investment; Figures; 1. Net Capital Flows into China; 2. Saving and Investment; 3. Productivity Shock; 4. Foreign Interest Rate Schock

5. Foreign Output Shock 6. Transition to Steady State when 10/l* = z0/z* = 0.9; 5. Convergence and Transition Half Life α = 1; 6. Convergence and Transition Half Life α = 1; 7. Simulation Results; References; Appendix

Notes:

"April 2008."

At head of title: IMF Institute.

Includes bibliographical references (p. 28-30).

Description based on print version record.

ISBN:

9786612840548

9781462317462

1462317464

9781452784403

145278440X

9781451869606

1451869606

9781282840546

1282840541

OCLC:

535146881