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The Macroeconomic Effects Of Enhanced Reforms In China

Author

Listed:
  • ZHIHONG JIAN

    (School of Economics, Huazhong University of Science and Technology, No. 1037 Luoyu Road, Wuhan 430074, Hubei Province, P. R. China)

  • YEQING YANG

    (School of Economics, Huazhong University of Science and Technology, No. 1037 Luoyu Road, Wuhan 430074, Hubei Province, P. R. China)

Abstract

Motivated by the idea that substantive reforms in China always happen intermittently and randomly, this paper constructs an RBC model, augmented with a shock that reflects the role of reforms and its randomly occurring character, to investigate the macroeconomic effects of enhancing the reform intensity. An increase in the average intensity of reforms leads to a higher economic growth rate permanently and provides sustainable support for economy when the potential growth rate declines. But it decreases the ergodic steady state of the detrended output, and this could have an adverse effect on economic growth in the short run.

Suggested Citation

  • Zhihong Jian & Yeqing Yang, 2020. "The Macroeconomic Effects Of Enhanced Reforms In China," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 65(06), pages 1619-1644, December.
    • Handle: RePEc:wsi:serxxx:v:65:y:2020:i:06:n:s0217590819500358
    DOI: 10.1142/S0217590819500358
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