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Effective Demand, Local Governments and Economic Growth in Post-Mao China: A Spatial Econometrics Perspective

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Author Info
Yongbok Jeon
Abstract

The purpose of this study is to empirically test the validity of Kaldor’s laws of economic growth in China between 1978 and 2004 and to provide an alternative explanation of sources of Chinese economic growth in a Kaldorian perspective. First, in a spatial econometrics perspective using a regional data set, the present paper empirically verifies that Kaldorian hypotheses on economic growth hold in China during the sample period. Second, it suggests the empirical findings as proving the validity of a demand-side approach. Third, taking this implication, this study provides a more detailed alternative explanation of the sources and processes of economic growth in China during the sample period. Finally, considering a striking finding of the lack of spatial (regional) dependence among Chinese provinces, it also discusses the role of local governments in the development process in China. This study is expected to contribute to the literature as being one of the first studies that identifies sources of Chinese economic growth in demand side.

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File URL: http://www.econ.utah.edu/activities/papers/2008_04.pdf
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Publisher Info
Paper provided by University of Utah, Department of Economics in its series Working Paper Series, Department of Economics, University of Utah with number 2008_04.

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Length: 32 pages
Date of creation: Apr 2008
Date of revision:
Handle: RePEc:uta:papers:2008_04

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Related research
Keywords: Economic growth in China; Kaldor’s laws; effective demand; Chinese local governments;

Find related papers by JEL classification:
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
R58 - Urban, Rural, and Regional Economics - - Regional Government Analysis - - - Regional Development Policy

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