“China’s Lost Generation: Changes in beliefs and their intergenerational transmission”
Gerard Roland and David Y. Yang
NBER Working Paper No. 23441
China’s Cultural Revolution suspended regular higher education for an entire decade (1966-1976), creating the so-called Lost or Delayed Generation. Growing up during that period the Delayed Generation was deprived of higher education opportunities at an age when youths would typically consider attending college. This shock allows Roland and Yang to examine if differences in the opportunity cost of attending university persistently shaped citizens’ beliefs on whether efforts pay off in determining success. Moreover, they investigate to what extent the changed beliefs may affect citizens’ behavior, particularly their decisions to invest in their children’s education and to transmit such beliefs to the next generation.
„A Real Estate Boom With Chinese Characteristics”
Edward Glaeser, Wei Huang, Yueran Ma, and Andrei Shleifer
In: Journal of Economic Perspectives Vol. 31, No. 1, 93-116
Is the Chinese real estate boom a bubble? This question takes the center stage in the paper of Glaeser et al. They approach it by analyzing the determinants of demand and supply of housing in China. Further they use the great housing boom in the United States as a benchmark to put the Chinese boom into perspective and highlight its unique features. Finally they conclude, that a housing crash isn’t inevitable, but that the outcome depends largely on the decisions that will be made by the Chinese government.
„Human Capital and China’s Future Growth”
Hongbin Li, Prashant Loyalka, Scott Rozelle, and Binzhen Wu
In: Journal of Economic Perspectives Vol. 31, No. 1, 25-48
Li et al. consider the sources and prospects for economic growth in China with a focus on human capital. They present a short overview about the Chinese hukou-policy and its development. By using an ordinary least square regression model, the typical relationship between human capital and output in different economies around the world is shown. In the end they present some policy suggestions of what China can do today to further raise its human capital up on to the standard of high-income countries.
„From ‚Made in China‘ to ‚Innovated in China’?: Necessity, Prospect and Challenges”
Shang-Jin Wei, Zhuan Xie, and Xiaobo Zhang
In: Journal of Economic Perspectives Vol. 31, No. 1, 49–70
The Chinese economy is at a crossroad. Structural factors in the form of less-favorable demographics and a higher cost of labor imply a lower potential growth rate. To achieve robust future growth structural reforms are a must. Therefore Wei et al. study three questions. First, how strong is the Chinese’s national investment in research and development (R&D). Second, what is the growth of innovation by Chinese firms. Third, are there significant resource misallocations in the innovation space. They find that Chinese firms have demonstrated the capacity to become more innovative in response to wage pressure and global opportunities. Further they show that government subsidies tend to favor state-owned firms, and yet both domestic private sector firms and foreign-invested firms are more effective in converting investment in R&D to innovation outcomes as measured by patents.
“Tariffs and the organization of trade in China”
Loren Brandt, Peter M. Morrow
in: Journal of International Economics Vol. 104, 85-103
Beginning in the mid-1990s, China started a program of tariff liberalization that saw average tariffs fall from over 40 percent in 1995 to less than 10 percent in 2001. This paper examines the impact of China’s falling import tariffs on the organization of its exports between ordinary and processing trade.
“The Great Housing Boom of China”
Kaiji Chen, Yi Wen
in: American Economic Journal: Macroeconomics, Vol. 9, No. 2, 73-114
Real housing prices outpacing income, a high vacancy rate, and a high rate of return to capital: this describes the current and puzzling situation on the Chinese real estate market. Chen and Wen present a model that interprets China’s housing boom as a rational bubble and fits with many salient features of the Chinese economy.
“China’s GDP Growth May Be Understated”
Hunter Clark, Maxim Pinkovskiy. Xavier Sala-i-Martin
NBER Working Paper No. 23323
Clark et al. discuss the concerns about the quality of China’s official GDP statistics and whether Chinese growth is under- or overstated by those statistics. Therefore they exploit nighttime lights to compute the optimal weights for various economic indicators to a best unbiased predictor of Chinese growth rates.
“Industrial Policies for Avoiding the Middle-income Trap: A New Structural Economics Perspective”
Justin Yifu Lin
in: Journal of Chinese Economic and Business Studies Vol. 15, No. 1, 5-18
In this paper Lin presents a manual how middle-income countries can avoid the middle-income trap by using limited resources to facilitate technological innovation and industrial upgrading. Thus, these economies can overcome coordinating issues and inherent externalities during the process of structural transformation.
Thai-Ha Le, Jungsuk Kim & Minsoo Lee
Emerging Markets Finance & Trade, 52:1047–1059, 2016
We examine the determinants of financial sector development in Asia and the Pacific from 1995 to 2011. In terms of economic growth, over the last twenty years the region has outperformed other parts of the world and has also experienced major developments in its traditionally bank-dominated financial system since the 1997 Asian financial crisis. We apply the dynamic generalized method of moments to a panel data set of twenty-six economies in the region. The estimations were done for the whole panel as well as for subpanels of developed and developing economies. We find that better governance and institutional quality foster financial sector development in developing economies while economic growth and trade openness are key determinants of financial depth in developed economies.
Minsoo Lee, Ruben Carlo Asuncion & Jungsuk Kim
Emerging Markets Finance & Trade, 52:923–937, 2016
Before the 2008 global financial crisis, bank monitoring focused primarily on risks to individual institutions, or what are generally referred to as prudential risks. Regulators thus failed to consider that a buildup of macroeconomic risks and vulnerabilities could pose systemic risk to the financial sector. The global credit crisis showed the inadequacy of purely prudential surveillance systems and the need for bank supervisors to better detect the buildup of macroeconomic risks before they can threaten the financial system. This article presents an empirical framework for analyzing how effectively macroprudential policies control credit growth, leverage growth, and housing price appreciation. Two significant findings emerge. Broadly, macroprudential policies can indeed promote financial stability in Asia. More specifically, different types of macroprudential policies are proved effective for different types of macroeconomic risks.