Sophia Chen, Lev Ratnovski and Pi-Han Tsai
IMF Working Paper WP/17/273
Chen et al. estimate credit and fiscal multipliers in China. They 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. The results suggest that reducing credit growth in China is unlikely to disrupt output growth, whereas fiscal policy may be effective in supporting macroeconomic adjustment.
Zheng Michael Song and Wei Xiong
NBER Working Paper No. 24230
Since 2008 the Chinese debt-to-GDP ratio skyrockets. This fact, and the high leverage as well as the soaring housing prices, have caused wide concerns about the risks and instability of China’s financial system. Motivated by these concerns Song and Xiong reviewed several commonly perceived financial risks in their article and discuss the roots in China’s unique economic and financial system.
From 3rd – 11th of January Prof. Wagner and Linda Glawe presented their current research in the USA. They presented their new paper “A Stylized Model of China’s Growth Since 1978” at the 2018 ASSA Annual Meeting of the American Economic Association held in Philadelphia, Pennsylvania (the program is available here). Furthermore, Prof. Wagner held, on invitation, a workshop at the IMF in Washington, D.C. about “China and the Middle-Income Trap” where he and Miss Glawe presented their latest papers and research results.
Due to his 40th-year jubilee in the public service , Prof. Dr. Helmut Wagner was honored by Prof. Dr. Ada Pellert, the rector of the Fernuniversität in Hagen. Prof. Dr. Pellert especially emphasized Prof. Wagner’s value for the FernUniversität as an internationally highly recognized researcher. In 1976, he earned his doctoral degree at the University of Regensburg. In 1982 he took the position of a full professor at an university in Hamburg. Since 1995 he is full professor and chair holder of macroeconomics at the Fernuniversität Hagen, moreover he is the head of the macroeconomic section in the institute “Hagener Managementstudien” and head of the Center for East Asia Macroeconomic Studies (CEAMeS).
Particularly Prof. Dr. Wagner’s remarkable international cooperation and his numerous, worldwide research trips were highlighted by Prof. Dr. Pellert. Besides of regular invitations by the International Monetary Fund, he has hold numerous visiting positions at other renowned institutions such as Princeton University, MIT, US Fed or the Bank of Japan. Prof. Dr. Pellert considers Prof. Dr. Wagner as a role model for other researchers because of his great number of international contacts.
If you want to read the full article in German, you can find it here.
We updated the conference section of our website and added six conferences (you can find them here). They all deal with East-Asian topics in one way or another, and take place in 2018. Following the corresponding link beneath each conference, you will reach the associated conference homepage. There you can find all useful information, such as deadlines, registration information or preliminary programs.
Leilei Shen and Peri Silva
In: European Economic Review, Vol. 101, January 2018, Pages 479-504
In this paper, the main focus is the direct contribution of the Chinese economy to changes in U.S. labor market outcomes. Their strategy follows the insights provided by a model of international trade with G regions, where N of these regions represent commuting zones in the U.S. economy, and where firms in a particular sector and country are assumed to have access to the same technology displaying increasing returns to scale.
Chiu Yu Ko, Mark Koyama and Tuan-Hwee Sng
In: International Economic Review, January 2018, Vol. 59, No. 1, forthcoming
Throughout much of history,the most economically developed region of the world wasn’t Europe but China, which was typically a unified empire. This paper proposes a unified framework based on Eurasian geography to (a) help explain the different political equilibria in China and Europe, and (b) explore the economic consequences of political centralization and fragmentation.
Erwin Bult, Lih Xu and Xiaobo Zhang
In: European Economic Review, Vol. 101, January 2018, Pages 441-458
Bult et al. adopt a disaggregate approach to study the link between aid and Dutch Disease dynamics, using a natural experiment in China. Specifically, they examine whether post- disaster aid provided to a subsample of Chinese counties, devastated by an earthquake in 2008, affects the sectoral composition of local economies. Using different methods, they consistently find that counties receiving (more) aid —even “nearby counties” not directly damaged by the earthquake —tend to suffer from a contraction of the manufacturing sector.
Suqin Ge, Dennis Tao Yang, Junsen Zhang
In: European Economic Review, Vol. 101, January 2018, Pages 181 – 209
Household saving rates have increased dramatically over the past two decades in China, in addition to the rise in average saving rate; the age-saving profile has also evolved into an unusual pattern. In this paper, Ge et al. propose and test a new hypothesis that demographic structural changes caused by a series of population control policies since the 1970s have contributed to changes in China’s household saving patterns. Therefor they develop a simple overlapping generation (OLG) model to illustrate the effects of population control policies and demographic structural changes on saving decisions of individuals at different life stages.
Xianfeng Jiang and Frank Packer
BIS Working Papers No. 648
In contrast to the the domestic rating agencies the top global agencies, headquartered outside of China, rate bonds, that are issued overseas by Chinese corporations, usually with much lower grades. In this paper, Jiang and Packer examine the risk assessments of Chinese (non-financial) companies published by the major Chinese rating agencies and the two largest global rating agencies. Further, they investigate the degree to which rating scales are comparable between domestic rating agencies, as well as between domestic and global rating agencies.
Monica Martinez-Bravo, Gerard Padró I Miquel, Nancy Qian and Yang Yao
NBER Working Paper No. 24032
In the late 80’s and early 90’s China has introduced elections at the local level. The functions of these locally elected bodies are typically managerial or administrative, with little political consequence. Hence, existing theories that explain the presence of elections at the elite level do not provide a good framework for understanding the presence of local elections. Thus, the main goal of the paper by Martinez-Bravo et al. is to address this gap in the literature and provide a theory and empirical evidence on the conditions under which an autocratic regime would allow local elections.
Ding Ding, Xiaoyu Huang, Tao Jin and W. Raphael Lam
IMF Working Paper WP/17/248
In this paper Ding et al. use city-level real estate data to estimate the range of overvaluation of real estate markets across city-tiers in China. Further, they assesse the main risks of a real estate slowdown and its impact on economic growth and financial stability. They assume, if house prices rise further beyond “fundamental” levels and the bubble expands to smaller cities, it would increase the likelihood and costs of a sharp correction. That could weaken growth, undermine financial stability, reduce local government spending room, and spur capital outflows
The paper “China Caught in the ‘Middle-Income Trap’?” was recently published on VoxChina. You can find a PDF version of the article here: PDF
VoxChina (accesible under: http://voxchina.org/) is an independent, non-partisan and non-profit platform initiated by a group of experienced and accomplished economists. The mission of VoxChina is to be the bridge on economic issues between China and the rest of the world by providing informed analysis on the state of the Chinese economy and insights for reform challenges facing China today, and by analyzing the impact of the development in the rest of the world economies on China.
The founding institutional sponsors of VoxChina include the Bendheim Center of Finance (Princeton University), the Department of Economics (University of Pennsylvania), the School of Economics and Management (Tsinghua University), the Shenzhen Finance Institute (The Chinese University of Hong Kong, Shenzhen) and the Guanghua School of Management (Peking University).
Statements of Professor Wagner are cited in the regional newspaper “Westfalenpost”. He gave his opinion on the future investment strategy of China.
You can read the article online following this link.