Title Credit and fiscal multipliers in China / by Sophia Chen, Lev Ratnovski, and Pi-Han Tsai

Published [Washington, D.C.] : International Monetary Fund, [2017] ©2017

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Description 1 online resource (27 pages) Series IMF Working Paper ; WP/17/273 IMF working paper ; WP/17/273. Contents Cover; Contents; I. Introduction; II. Data and method; III. Results; A. Credit and fiscal multipliers; B. Robustness; C. Industry composition; D. Discussion on â#x80;#x9C;open economy multipliersâ#x80;#x9D;; IV. Conclusion; Figure; Figure 1. The correlation of bank loans and TSF growth; Figure 2. Appointments of provincial party secretaries; Figure 3. Credit and expenditure growth over the tenure of provincial party secretaries; Figure 4. Sensitivity to other provincesâ#x80;#x99; stimulus policies over the tenure of provincial secretaries; Table; Table 1. Summary statistics Table 2. Appointments of party secretaries and provincial economic conditionsTable 3. Full sample results; Table 4. Early and late subsamples results; Table 5. Weighted results; Table 6. Sectoral multipliers; References Summary We jointly estimate credit and fiscal multipliers in China. We use the tenure of the provincial party secretary, interacted with the type of stimulus used in other provinces, to obtain separate instruments for provincial credit and government expenditure. We estimate a fiscal multiplier of 0.8 and a credit multiplier of 0.2 in 2001-2015. The multipliers have changed over time. The fiscal multiplier has increased from 0.75 in 2001-2008 to 1.4 in 2010-2015. The credit multiplier has declined from 0.17 to zero over the same periods. Our results suggest that reducing credit growth in China is unlikely to disrupt output growth, whereas fiscal policy may be effective in supporting macroeconomic adjustment Notes Print version record Subject Credit -- China Fiscal policy -- China -- Econometric models BUSINESS & ECONOMICS -- Finance. Credit Economic history Fiscal policy -- Econometric models SUBJECT China -- Economic conditions -- Econometric models Subject China Form Electronic book Author Ratnovski, Lev, author. Tsai, Pi-Han, author ISBN 1484332210 1484332164 9781484332160 9781484332214

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