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Has China's Economy Become More Stable and Inertial? Nonlinear Investigations Based on Structural Break and Duration Dependent Regime Switching Models


  • Angang Hu

    (School of Public Policy and Management, Tsinghua University)

  • Jie Lu

    (School of Public Policy and Management, Tsinghua University)

  • Zhengyan Xiao

    (The Center for Applied Statistics, Renmin University of China)


In this study we use both the structural break model and duration dependent transition model to study the characteristics of China's GDP growth from 1953 to 2009. The empirical results show that China's economic growth had become more stable since the economic reform in the end of the 1970s, and had transformed from a "low growth rate, high volatility" state to a "high growth rate, low volatility" state. In contrast to other transitional countries, China's structural break did not happen immediately, but rather it experienced a long transition period (1977-1992) which shows that China's economic development has a strong "growth inertia".

Suggested Citation

  • Angang Hu & Jie Lu & Zhengyan Xiao, 2011. "Has China's Economy Become More Stable and Inertial? Nonlinear Investigations Based on Structural Break and Duration Dependent Regime Switching Models," Annals of Economics and Finance, Society for AEF, vol. 12(1), pages 157-181, May.
  • Handle: RePEc:cuf:journl:y:2011:v:12:i:1:p:157-181

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    References listed on IDEAS

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    More about this item


    Structural break; Duration dependent transition; Growth inertia;

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East


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