Spending in social services in China: A multi-country analysis

Oscar Bajo-Rubio () and Gómez‐Plana, Antonio G.
Authors registered in the RePEc Author Service: Antonio Gómez Gómez-Plana

No 447, GLO Discussion Paper Series from Global Labor Organization (GLO)

Abstract: In this paper, we simulate the effects of an increase in the levels of public spending in health care and social assistance in the Chinese economy, and examine its global effects, i.e., the effects on the main macroeconomic variables of seven regions of the world economy, namely, China, Japan, United States, European Union, Latin America, Asia‐Pacific and Rest of the World. Three different rules to finance the increase in public expenditure are considered. The empirical methodology makes use of a computable general equilibrium model, through an extension of the Global Trade Analysis Project model. The policy measure simulated led to either expansionary or contractionary effects on China’s activity levels, depending on whether the government deficit is left to increase, or if taxes are raised instead in order to offset it. While no sector seemed to be particularly hurt by this measure, trade flows were negatively affected, but this did not seem to have a strong influence on the rest of the world.

Keywords: Computable general equilibrium; Spending in social services; Global economy; China (search for similar items in EconPapers)
JEL-codes: D58 H53 H62 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:glodps:447

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