| Description |
1 online resource (34 pages) : illustrations |
| Series |
IMF working paper, 2227-8885 ; WP/06/291 |
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IMF working paper ; WP/06/291.
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| Contents |
Contents -- I. INTRODUCTION -- II. CONSUMPTION, INVESTMENT, AND SAVINGS IN CHINA -- III. THE CHINESE ECONOMY AS A NEOCLASSICAL GROWTH MODEL -- IV. CALIBRATING THE GROWTH MODEL -- V. SIMULATING THE MODEL: THE FIRST CUT -- VI. INTRODUCING INVESTMENT WEDGE -- VII. FINANCIAL FRICTIONS AS INVESTMENT WEDGES -- VIII. CONCLUSIONS -- REFERENCES |
| Summary |
This paper uses the standard one-sector neoclassical growth model to investigate why China's consumption has been low and investment high. It finds that the low cost of capital has been quantitatively an important factor. Theory predicts that the price of capital may have been significantly distorted in the 1990s and 2000s. The distortion could have been caused by nonperforming loans, borrowing constraints, and uncertainty over changes in government guidance in bank lending. If China is to rebalance growth towards relying more on consumption and less on exports and investment, banking sector reforms and financial market development could, therefore, turn out to be key |
| Bibliography |
Includes bibliographical references (pages 32-34) |
| Notes |
Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212 MiAaHDL |
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English |
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digitized 2010 HathiTrust Digital Library committed to preserve pda MiAaHDL |
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Print version record |
| Subject |
Business cycles -- China -- Econometric models
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Economic development -- China
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Capital market -- China
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Consumption (Economics) -- China
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Investments -- China
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Finance -- China
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Business cycles -- Econometric models
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Capital market
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Consumption (Economics)
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Economic development
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Economic policy
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Finance
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Investments
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| SUBJECT |
China -- Economic policy.
http://id.loc.gov/authorities/subjects/sh85024018
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| Subject |
China
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| Form |
Electronic book
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| Author |
International Monetary Fund. Asia and Pacific Department.
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| ISBN |
1283513234 |
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9781283513234 |
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9781451910049 |
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1451910045 |
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1462376029 |
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9781462376025 |
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1452736006 |
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9781452736006 |
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9786613825681 |
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6613825689 |
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