Can Consumption Growth in China Keep Up As Investment Slows?
Mali Chivakul and
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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
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: E21 E22 E27 E44 E47 E52 C12 C32 C33 O53 (search for similar items in EconPapers)
Pages: 33 pages
New Economics Papers: this item is included in nep-cna and nep-mac
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Published in Comparative Economic Studies, available on 13 June 2019
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Journal Article: Can Consumption Growth in China Keep Up as Investment Slows? (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:cth:wpaper:gru_2018_026
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