Balance-of-Payment-Constrained Growth: The Case of China, 1979-2002

Yongbok Jeon

Working Paper Series, Department of Economics, University of Utah from University of Utah, Department of Economics

Abstract: The aim of this study is to empirically test the validity of Thirlwalls Law in China during the reform period of 1979-2002. For the income elasticity of import demand, an aggregate import demand function for the Chinese economy is estimated using ARDL-UECM model and the bounds test. This study finds (1) that for 1979-2002, the Chinese economy has grown on average as fast as Thirlwalls Law predicts, the average actual growth rate and predicted growth rate were, respectively, 9.25 and 8.55, which are statistically identical; (2) that the growth of GDP and of exports are cointegrated. Both (1) and (2) provide strong support for Thirlwalls Law in China during the reform period after 1978. The supportive result of Thirlwalls Law implies the relevance of demand-side approach to economic growth in China.

Keywords: Chinese economy; balance-of-payment constrained growth; aggregate import function; trade multiplier; bounds test for cointegration (search for similar items in EconPapers)
JEL-codes: F14 F43 O53 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2006
New Economics Papers: this item is included in nep-cna, nep-int, nep-sea and nep-tra
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://economics.utah.edu/research/publications/2006_06.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:uta:papers:2006_06

Access Statistics for this paper

More papers in Working Paper Series, Department of Economics, University of Utah from University of Utah, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by (subhasish.dugar@economics.utah.edu).