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Procyclical Productivity and Output Growth in China: An Econometric Analysis

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Author Info
Massimo Caruso ()
Abstract

This paper analyzes the procyclical behavior of Chinese Total Factor Productivity (TFP). It shows that measured Solow residuals are correlated to the growth rate of real imports per worker and to other macroeconomic variables that fluctuate at cyclical frequencies. The magnitude of the trend shift in TFP after the start of economic reforms in 1978 is found to be robust to the introduction of cyclical factor utilization and other systematic influences on productivity. The propagation mechanisms of macroeconomic shocks to output are also evaluated on the basis of a seven-variable VAR system. The empirical results indicate that the growing openness of the economy has contributed to sustaining the observed long run productivity increases and has raised spatial inequality. Copyright Kluwer Academic Publishers 2002

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File URL: http://hdl.handle.net/10.1023/A:1015243904051
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Publisher Info
Article provided by Springer in its journal Open Economies Review.

Volume (Year): 13 (2002)
Issue (Month): 3 (July)
Pages: 251-274
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Handle: RePEc:kap:openec:v:13:y:2002:i:3:p:251-274

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Related research
Keywords: economic growth; economies in transition; total factor productivity; labor hoarding; openness;

References listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Paresh Kumar Narayan & Russell Smyth, 2004. "Temporal Causality and the Dynamics of Exports, Human Capital and Real Income in China," The International Journal of Applied Economics, Department of General Business, Southeastern Louisiana University, vol. 1(1), pages 24-45, September. [Downloadable!]
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