China: An Institutional View of an Unusual Macroeconomy / David Dollar, Benjamin F. Jones.

Format:

Book

Author/Creator:

Dollar, David.

Contributor:

National Bureau of Economic Research.

Jones, Benjamin F.

Series:

Working Paper Series (National Bureau of Economic Research) no. w19662.

NBER working paper series no. w19662

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2013.

Summary:

China presents several macroeconomic patterns that appear inconsistent with standard stylized facts about economic development and hence inconsistent with the standard neoclassical growth model. We show that Chinese macroeconomic patterns instead appear consistent with an environment where state control of factor markets can promote aggressive output goals. We consider the micro-institutional features that can sustain this behavior, emphasizing the hukou system and state control over capital allocation, and present a simple model built on these features. The model can explain several puzzling facts about the Chinese economy, including its unusually low labor share and unusually high saving and investment rates. Interestingly, the model also shows that free-market reforms can initially take the economy further from global macroeconomic norms.

Notes:

Print version record

November 2013.