Rigid wage-setting and the effect of a supply shock, fiscal and monetary policies on Chinese economy by a CGE analysis

Meng Li and Liang Yang

Economic Modelling, 2012, vol. 29, issue 5, 1858-1869

Abstract: The purpose of this paper is to present a computable general equilibrium (CGE) model of the Chinese economy which includes rigid wage-setting and integration of real and financial sectors, and to apply it to a quantitative evaluation of the oil price changes and the fiscal and monetary policies. The policy simulation shows whether the wage rate is flexible or rigid is crucial for the evaluation of various policy measures. Furthermore, the fields of application of the model are extended from the industry-related problems to the macroscopic ones such as inflation, stabilization policies and so on.

Keywords: Rigid wage-setting; Inflation; CGE model; Economic system; Policy simulation (search for similar items in EconPapers)
JEL-codes: C68 F33 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:29:y:2012:i:5:p:1858-1869

DOI: 10.1016/j.econmod.2012.05.031

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