Can Consumption Growth in China Keep Up As Investment Slows?

Mali Chivakul and Bernhard Kassner
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Mali Chivakul: IMF

No GRU_2018_026, GRU Working Paper Series from City University of Hong Kong, Department of Economics and Finance, Global Research Unit

Abstract: Rebalancing away from investment to consumption has been on China’s agenda in or- der to keep up higher growth rates. This paper uses both national- and provincial-level data to empirically answer the question how a slowdown in investment could have an impact on household consumption. Our empirical results from both the national- and provincial-level data using Bayesian vector autoregressions and panel regression meth- ods suggest that investment has had a significant impact on household consumption beyond the standard household income channel. The effects are particularly strong in the post-global-financial-crisis period. Policy measures to encourage rebalancing away from investment should take the extra effect it may have on consumption beyond the impact on household income into account.

Keywords: Reforms; Investment; Consumption; China (search for similar items in EconPapers)
JEL-codes: C12 C32 C33 E21 E22 E27 E44 E47 E52 O53 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2018-12-27
New Economics Papers: this item is included in nep-cna and nep-mac
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Citations: View citations in EconPapers (1)

Published in Comparative Economic Studies, available on 13 June 2019

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https://www.cb.cityu.edu.hk/ef/doc/GRU/WPS/GRU%232018-026%20Kassner.pdf (application/pdf)

Related works:
Journal Article: Can Consumption Growth in China Keep Up as Investment Slows? (2019)
Working Paper: Can Consumption Growth in China Keep Up as Investment Slows? (2019)
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