New Analysis on the Growth Effects of Factor Allocation in China
Read
DownLoad |
| Title | New Analysis on the Growth Effects of Factor Allocation in China
|
| Author | Xin Chao, Zhang Ping and Yuan Fuhua |
| Organization | Graduate School of CASS; Institute of Economics, Chinese Academy of Social Science |
| Email | xinchao121@126.com; zhangping_cass@126.com; fuhua_yuan1@163.com |
| Key Words | Structural reduction of growth; Structural effects; Factor allocation; Capital stock |
| Abstract | This paper promotes the research on the structural impacts from capital and labor allocation in China by using the multi-sector model of growth accounting. It confirms that there are serious deficiencies in the official statistical method for industrial investments, which distort calculations of industrial capital stock and the influence of capital allocation. By excluding the real estate industry, the results show a dramatic improvement of capital allocation since the middle of 1990s but a serious misallocation of capital that resulted from the 4 trillion stimulus plan. The study about the effect of labor allocation (SGL) shows an average impact on growth of 0.63 percentage points which is related positively with both economic growth and TFP, and reveals ten-year political cycles originating from cyclic reforms. The results of international comparison indicate that there are three periods for SGLs, in which SGLs are high, medium and low respectively. The authors predict that China’ SGL will remain in the high period until 2017, and it is the period of 2017 - 2023 that is the dramatic transition stage leading to the medium SGL when China’s economy will suffer significant pressures arising from the structural slowdown. The low period will emerge after 2030, then no longer will SGL be conspicuous. These findings improve the estimations of growth trend of China’s economy and contribute to subsequent research. |
| Serial Number | WP648 |
| Time | 2014-08-08 |
|