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The global recession and China's stimulus package: A general equilibrium assessment of country level impacts

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  • Diao, Xinshen
  • Zhang, Yumei
  • Chen, Kevin Z.

Abstract

A dynamic computable general equilibrium model is developed to assess the impact of the recent global recession and the Chinese government's stimulus package on China's economic growth. By designing two scenarios – one with and one without the stimulus package – the model results show that GDP growth rate in 2009 could have fallen to 2.9% without the stimulus package, mainly as a result of the sharp decline in exports of manufactured goods. Under the stimulus scenario, with the generated additional demand on investment goods, the Chinese economy grows 8–10% in 2009 and the succeeding years. The model also measures the overall gains of the stimulus package, and the cumulative GDP growth difference between the two scenarios for 2009–15 is about RMB76 trillion.

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Bibliographic Info

Article provided by Elsevier in its journal China Economic Review.

Volume (Year): 23 (2012)
Issue (Month): 1 ()
Pages: 1-17

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Handle: RePEc:eee:chieco:v:23:y:2012:i:1:p:1-17

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Web page: http://www.elsevier.com/locate/chieco

Related research

Keywords: Global financial crisis; China's stimulus package; General equilibrium modeling;

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References

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  2. Diao, Xinshen & Hazell, Peter & Resnick, Danielle & Thurlow, James, 2006. "The role of agriculture in development: implications for Sub-Saharan Africa," DSGD discussion papers 29, International Food Policy Research Institute (IFPRI).
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Cited by:
  1. Li, Fangyi & Song, Zhouying & Liu, Weidong, 2014. "China's energy consumption under the global economic crisis: Decomposition and sectoral analysis," Energy Policy, Elsevier, vol. 64(C), pages 193-202.

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