China's Business Cycles: Perspectives from an AD-AS Model
AbstractThe present paper represents a first attempt to study China's business cycles using a formal analytical framework; namely, a structural VAR model. It is found that (i) demand shocks were the dominant source of macroeconomic fluctuations, but supply shocks had gained more importance over time; (ii) driving forces of demand shocks were consumption and fixed investment in the first cycle of 1985-1990, but shifted to fixed investment and world demand in the second cycle of 1991-1996 and the post-1997 deflation period; and (c) macroeconomic policies did not play an important part either in initiating or counteracting cyclical fluctuations. Copyright 2005 East Asian Economic Association.
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Bibliographic InfoPaper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number UNU-WIDER Research Paper RP2004/54.
Length: 24 pages
Date of creation: 2004
Date of revision:
business cycle; structural VAR; demand shocks; supply shocks; China;
Other versions of this item:
- Yin Zhang & Guanghua Wan, 2005. "China's Business Cycles: Perspectives from an AD-AS Model ," Asian Economic Journal, East Asian Economic Association, vol. 19(4), pages 445-469, December.
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