IDEAS home Printed from https://ideas.repec.org/a/acb/agenda/v18y2011i1p23-34.html
   My bibliography  Save this article

China's Fiscal Stimulus and the Recession Australia Never Had: Is a Growth Slowdown Now Inevitable?

Author

Listed:
  • Creina Day

Abstract

China's timely and well-targeted two-year fiscal stimulus was particularly effective in stimulating growth in Australia's commodity exports. Using a constructed series of export volumes to China, this paper finds that the post-stimulus GDP growth contribution from export volumes to China is significant. Had growth in export volumes to China been commensurate with pre-stimulus rates, Australia would have experienced three consecutive quarters of negative real GDP growth in a technical recession. China's gradual and uniquely revenue-based unwinding of fiscal stimulus reduces the risk to Australia of an imminent growth slowdown.

Suggested Citation

  • Creina Day, 2011. "China's Fiscal Stimulus and the Recession Australia Never Had: Is a Growth Slowdown Now Inevitable?," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 18(1), pages 23-34.
    • Handle: RePEc:acb:agenda:v:18:y:2011:i:1:p:23-34
    as

    Download full text from publisher

    File URL: http://press-files.anu.edu.au/downloads/press/p115201/pdf/ch035.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Cova, Pietro & Pisani, Massimiliano & Rebucci, Alessandro, 2010. "Macroeconomic Effects of China's Fiscal Stimulus," IDB Publications (Working Papers) 1983, Inter-American Development Bank.
    2. Jordi Galí & J. David López-Salido & Javier Vallés, 2007. "Understanding the Effects of Government Spending on Consumption," Journal of the European Economic Association, MIT Press, vol. 5(1), pages 227-270, March.
    3. Rod Tyers & Ling Huang, 2009. "Combating China’s Export Contraction: Fiscal Expansion or Accelerated Industrial Reform?," Economics Discussion / Working Papers 09-15, The University of Western Australia, Department of Economics.
    4. Anthony J. Makin, 2010. "Did Fiscal Stimulus Counter Recession? Evidence from the National Accounts," Discussion Papers in Economics economics:201008, Griffith University, Department of Accounting, Finance and Economics.
    5. Guay C. Lim & Chew Lian Chua & Edda Claus & Sarantis Tsiaplias, 2010. "Review of the Australian Economy 2009–10: On the Road to Recovery," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 43(1), pages 1-11, March.
    6. Dong He & Zhiwei Zhang & Wenlang Zhang, 2009. "How Large Will Be The Effect Of China'S Fiscal Stimulus Package On Output And Employment?," Pacific Economic Review, Wiley Blackwell, vol. 14(5), pages 730-744, December.
    7. Leigh Andrew, 2012. "How Much Did the 2009 Australian Fiscal Stimulus Boost Demand? Evidence from Household-Reported Spending Effects," The B.E. Journal of Macroeconomics, De Gruyter, vol. 12(1), pages 1-24, March.
    8. Anthony J. Makin, 2010. "Did Australia's Fiscal Stimulus Counter Recession?: Evidence from the National Accounts," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 17(2), pages 5-16.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Makin, Anthony J., 2019. "Lessons for macroeconomic policy from the Global Financial Crisis," Economic Analysis and Policy, Elsevier, vol. 64(C), pages 13-25.
    2. Phan, Tuan, 2016. "Has Monetary Policy Become More Aggressive, But Less Effective Over Time?," MPRA Paper 107200, University Library of Munich, Germany.
    3. Nicolaas Groenewold, 2017. "China’s ‘New Normal’: How will China’s growth slowdown affect Australia’s growth?," Economics Discussion / Working Papers 17-19, The University of Western Australia, Department of Economics.
    4. Tony McDonald & Steven Morling, 2011. "The Australian economy and the global downturn, Part 1: Reasons for resilience," Economic Roundup, The Treasury, Australian Government, issue 2, pages 1-31, September.
    5. Groenewold, Nicolaas, 2018. "Australia saved from the financial crisis by policy or by exports?," Journal of Policy Modeling, Elsevier, vol. 40(1), pages 118-135.
    6. Fardoust, Shahrokh & Lin, Justin Yifu & Luo, Xubei, 2012. "Demystifying China's fiscal stimulus," Policy Research Working Paper Series 6221, The World Bank.
    7. Day, Creina, 2019. "House prices post-GFC: More household debt for longer," Economic Analysis and Policy, Elsevier, vol. 64(C), pages 91-102.
    8. Nicolaas Groenewold, 2012. "Australia and the GFC: Saved by Astute Fiscal Policy?," Economics Discussion / Working Papers 12-28, The University of Western Australia, Department of Economics.
    9. Nicolaas Groenewold, 2018. "China's ‘New Normal’: How will China's Growth Slowdown Affect Australia's Growth?," Australian Economic Papers, Wiley Blackwell, vol. 57(4), pages 435-445, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bruno Martorano, 2015. "Lessons from the recent economic crisis: the Australian household stimulus package," International Review of Applied Economics, Taylor & Francis Journals, vol. 29(3), pages 309-327, May.
    2. Shuyun May Li & Adam Hal Spencer, 2016. "Effectiveness of the Australian Fiscal Stimulus Package: A DSGE Analysis," The Economic Record, The Economic Society of Australia, vol. 92(296), pages 94-120, March.
    3. Ross Guest & Anthony J. Makin, 2011. "In the Long Run, the Multiplier is Dead: Lessons from a Simulation," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 18(1), pages 13-22.
    4. Fardoust, Shahrokh & Lin, Justin Yifu & Luo, Xubei, 2012. "Demystifying China's fiscal stimulus," Policy Research Working Paper Series 6221, The World Bank.
    5. Nicolaas Groenewold, 2012. "Australia and the GFC: Saved by Astute Fiscal Policy?," Economics Discussion / Working Papers 12-28, The University of Western Australia, Department of Economics.
    6. Nicolaas Groenewold, 2018. "China's ‘New Normal’: How will China's Growth Slowdown Affect Australia's Growth?," Australian Economic Papers, Wiley Blackwell, vol. 57(4), pages 435-445, December.
    7. Makin, Anthony J., 2019. "Lessons for macroeconomic policy from the Global Financial Crisis," Economic Analysis and Policy, Elsevier, vol. 64(C), pages 13-25.
    8. Groenewold, Nicolaas, 2018. "Australia saved from the financial crisis by policy or by exports?," Journal of Policy Modeling, Elsevier, vol. 40(1), pages 118-135.
    9. Nicolaas Groenewold, 2017. "China’s ‘New Normal’: How will China’s growth slowdown affect Australia’s growth?," Economics Discussion / Working Papers 17-19, The University of Western Australia, Department of Economics.
    10. Felipe, Jesus & Lanzafame, Matteo, 2020. "The PRC's long-run growth through the lens of the export-led growth model," Journal of Comparative Economics, Elsevier, vol. 48(1), pages 163-181.
    11. Bruno Martorano, 2013. "The Australian Household Stimulus Package: Lessons from the recent economic crisis," Papers inwopa697, Innocenti Working Papers.
    12. Charlton, Andrew, 2019. "Fiscal policy in extraordinary times: A perspective from Australia’s experience in the global recession," Economic Analysis and Policy, Elsevier, vol. 64(C), pages 83-90.
    13. Makin, Anthony J. & Layton, Allan, 2021. "The global fiscal response to COVID-19: Risks and repercussions," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 340-349.
    14. Juha Tervala, 2009. "Productive government spending and private consumption: a pessimistic view," Economics Bulletin, AccessEcon, vol. 29(1), pages 416-425.
    15. Patrick Fève & Jean‐Guillaume Sahuc, 2017. "In Search of the Transmission Mechanism of Fiscal Policy in the Euro Area," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 32(3), pages 704-718, April.
    16. Barbara Annicchiarico & Fabio Dio & Francesco Felici, 2015. "Fiscal Devaluation Scenarios: A Quantitative Assessment for the Italian Economy," Open Economies Review, Springer, vol. 26(4), pages 731-785, September.
    17. Sushant Acharya & Edouard Challe & Keshav Dogra, 2023. "Optimal Monetary Policy According to HANK," American Economic Review, American Economic Association, vol. 113(7), pages 1741-1782, July.
    18. Marcellino, Massimiliano & Sivec, Vasja, 2016. "Monetary, fiscal and oil shocks: Evidence based on mixed frequency structural FAVARs," Journal of Econometrics, Elsevier, vol. 193(2), pages 335-348.
    19. Ferrara, Maria & Garofalo, Antonio & Agovino, Massimiliano, 2020. "Disinflation costs in China and monetary policy regimes," Economic Modelling, Elsevier, vol. 93(C), pages 586-594.
    20. Axelle Ferriere & Gaston Navarro, 2013. "The Heterogeneous Effects of Government Spending: It's All About Taxes," Working Papers 13-18, New York University, Leonard N. Stern School of Business, Department of Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:acb:agenda:v:18:y:2011:i:1:p:23-34. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/feanuau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.