The Economics of Price Scissors : An Empirical Investigation for China
AbstractThe Sah-Stiglitz "Economics of Price Scissors' model, concerning the political economy of price scissors, formulates the optimal terms of trade against peasants. In the present paper, by extending this model to an open economy and allowing agricultural rationing, we first check if the model stands up to China's data from 1949-1992, we find that the importance of peasants in the government's objective function is less than the importance of workers. In addition, the importance of consumption is also less than that of investment. Such findings are consistent with the reality of China.
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Bibliographic InfoPaper provided by East Asian Bureau of Economic Research in its series Governance Working Papers with number 22019.
Date of creation: Apr 2008
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China; Price Scissors; trade; political economy;
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"Development Strategy, Viability, and Economic Convergence,"
Economic Development and Cultural Change,
University of Chicago Press, vol. 51(2), pages 276-308, January.
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- Sah, Raaj Kumar & Stiglitz, Joseph E, 1986. "The Economics of Price Scissors: Reply," American Economic Review, American Economic Association, vol. 76(5), pages 1195-99, December.
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