The Neoclassical Growth of China

Fernández-Villaverde, Jesús, Lee Ohanian and Wen Yao
Authors registered in the RePEc Author Service: Jesus Fernandez-Villaverde

No 18193, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper studies China's four-fold increase in per capita GDP relative to the U.S. between 1995 and 2019. First, we argue that China's growth pattern is very similar to that of several other East Asia economies that initially grew very quickly. Second, we show that a minimalist Ramsey-Cass-Koopmans model with a parsimonious TFP catch-up process can account for China's growth path and the growth paths of other East Asia economies at a similar stage of development. The growth paths of other East Asia economies and the model predictions suggest that China's growth will substantially slow, so much so that we find the U.S. growth rate will likely be higher than China's by 2043. We also find that China's income per capita will level off at roughly 44% of the U.S. level around 2100.

Keywords: China (search for similar items in EconPapers)
JEL-codes: E10 E40 O40 (search for similar items in EconPapers)
Date: 2023-06
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Working Paper: The Neoclassical Growth of China (2023)
Working Paper: The Neoclassical Growth of China (2023)
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