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Role Of Economic Structural Adjustment For Long‐Term Economic Stability In China: Estimation Based On Variance Decomposition

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  • Hongsheng Fang
  • Xiangrong Jin
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    Abstract

    Based on the variance decomposition method of Eggers and Ioannides, the sources of long-term stability of the Chinese economy since the mid‐1990s are estimated and the potential influence of structural optimization is predicted. Results show that: (i) the contribution of industrial structural adjustment was a negative 46.38%; and (ii) if the share of the expenditure structure was adjusted to the average level in the early period, the contribution of structural optimization would be approximately 38.25%. Moreover, it is believed that a reasonable economic structure can be achieved only through the implementation of a development strategy that takes comparative advantage into consideration.

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    File URL: http://hdl.handle.net/10.1111/j.1468-0106.2010.00520.x
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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Pacific Economic Review.

    Volume (Year): 15 (2010)
    Issue (Month): 5 (December)
    Pages: 637-652

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    Handle: RePEc:bla:pacecr:v:15:y:2010:i:5:p:637-652

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    Web page: http://www.blackwellpublishing.com/journal.asp?ref=1361-374X

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