Demographic Transition, Industrial Policies, and Chinese Economic Growth

Michael Dotsey, Wenli Li and Fang Yang

No 22-17, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: We build a unified framework to quantitatively examine the demographic transition and industrial policies in contributing to China’s economic growth between 1976 and 2015. We find that the demographic transition and industrial policy changes by themselves account for a large fraction of the rise in household and corporate savings relative to total output and the rise in the country’s per capita output growth. Importantly, their interactions also lead to a sizable fraction of the increases in savings since the late 1980s and reduce growth after 2010. A novel and important factor that drives these dynamics is endogenous human capital accumulation, which depresses household savings between 1985 and 2010 but leads to substantial gains in per capita output growth after 2005.

Keywords: Aging; Credit policy; Household saving; Output growth; China (search for similar items in EconPapers)
JEL-codes: E21 J11 J13 L52 (search for similar items in EconPapers)
Pages: 54
Date: 2022-06-27
New Economics Papers: this item is included in nep-cna, nep-dem, nep-des, nep-dge, nep-gro, nep-his and nep-inv
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Related works:
Working Paper: Demographic Transition, Industrial Policies and Chinese Economic Growth (2024)
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DOI: 10.21799/frbp.wp.2022.17

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