Macro17The Economic Growth in China宏观经济学(南开大学,龚刚).pptVIP

Macroeconomics Lecture 17 The Economic Growth in China Questions to the mainstream growth theory Is full employment a necessary assumption to explain the economic growth? Must economic growth be supply-driven? Could it be demand-driven? Can the mainstream growth theory be able to explain China’s economic growth? The Basic Properties of Chinese Economy A developing country Less capital stock (facilities) per capita; Dual structure in urban and rural area, indicating unlimited supply of labor from countryside: labor resources are not fully employed. Inequality in regional development Convergence hypothesis indicates that ……. The Basic Properties of Chinese Economy A larger economy (in terms of population) May have some advantages comparing to small developing economy? A transition economy It is a market economy for most industries (no planning); Co-existence of private and state enterprises for most industries; Financial industries are still state-owned. High growth in China, an expression A Framework for analysis Must consider from both demand and supply perspective. Unemployment in economic resource (labor and capital stock?) is a simple observation. Must consider the investment High growth in China, an expression High growth from demand perspective Consumption Growth versus GDP Growth High growth in China, an expression Investment Growth versus GDP Growth High growth in China, an expression Investment versus Consumption High growth in China, an expression High growth from supply perspective High growth in investment indicates fast accumulation of capacity (facility) Labor supply is unlimited High growth in China, an expression Major conclusion The higher growth in investment is the major driving force to the high growth in China Investment not only creates demand via multiplier. Investment also creates capacity. Meanwhile labor supply is unlimited. Can we regard such explanation as being a demand driven (driven by demand for investment) perspective?