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The Mandarin Model of Growth

Author

Listed:
  • Wei Xiong

    (Princeton University)

Abstract

This paper expands a standard growth model to analyze the roles played by the government system in the Chinese economy, with a particular focus to include the agency problem between the central and local governments. The economic tournament among local governors creates career incentives for them to develop local economies. The powerful incentives also lead to short-termist behaviors, which explain a series of challenges that confront the Chinese economy, such as overleverage through shadow banking and unreliable economic statistics.

Suggested Citation

  • Wei Xiong, 2019. "The Mandarin Model of Growth," Working Papers 2019-10, Princeton University. Economics Department..
    • Handle: RePEc:pri:econom:2019-10
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    File URL: http://wxiong.mycpanel.princeton.edu/papers/Mandarin.pdf
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    References listed on IDEAS

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    Cited by:

    1. Kaiji Chen & Haoyu Gao & Patrick Higgins & Daniel F. Waggoner & Tao Zha, 2023. "Monetary Stimulus amidst the Infrastructure Investment Spree: Evidence from China's Loan‐Level Data," Journal of Finance, American Finance Association, vol. 78(2), pages 1147-1204, April.

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    More about this item

    Keywords

    China; Government; Standard Growth Model;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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