Many studies of regional disparity in China have focused on the preferential policies received by the coastal provinces. We decomposed the location dummies in provincial growth regressions to obtain estimates of the effects of geography and policy on provincial growth rates in 1996-99. Their respective contributions in percentage points were 2.5 and 3.5 for the province-level metropolises, 0.6 and 2.3 for the northeastern provinces, 2.8 and 2.8 for the coastal provinces, 2.0 and 1.6 for the central provinces, 0 and 1.6 for the northwestern provinces, and 0.1 and 1.8 for the southwestern provinces. Because the so-called preferential policies are largely deregulation policies that have allowed coastal Chinese provinces to integrate into the international economy, it is far superior to reduce regional disparity by extending these deregulation policies to the interior provinces than by re-regulating the coastal provinces. Two additional inhibitions to income convergence are the household registration system, which makes the movement of the rural poor to prosperous areas illegal, and the monopoly state bank system that, because of its bureaucratic nature, disburses most of its funds to its large traditional customers, few of whom are located in the western provinces. Improving infrastructure to overcome geographic barriers is fundamental to increasing western growth, but increasing human capital formation (education and medical care) is also crucial because only it can come up with new better ideas to solve centuries-old problems like unbalanced growth.Sylvie Démurger, s.
This paper lirst demonstrates that in a simple intertemporal open economy model, the current account is equal to the expected decline of the present discounted value of net output of a country.Net output is delined as gross domestic product less the sum of investment plus government spending. It then uses econometric methods for present value models to analyze the current account for four countries. In two of these countries, the model does a satisfactory job of explaining the current account.
Industrial Economies THE TURBULENT EVENTS in the world economy since 1973 have several times prompted the call for the major countries in the Organization for Economic Cooperation and Development (OECD) to coordinate their macroeconomic policies.I In the immediate aftermath of the 1973 oil We would like to thank Peter Hooper of the Board of Governors of the Federal Reserve System, Stephen Marris and John Williamson of the Institute for International Economics, and members of the Brookings Panel for helpful discussions. Data Resources, Inc., generously made available computer facilities for this study. The paper was written while Gilles Oudiz was a visiting scholar at the Massachusetts Institute of Technology, and he gratefully acknowledges the financial support of the North Atlantic Treaty Organization and the Fulbright fellowship program during this visit. 1. For useful discussions of the policy coordination debate in the context of the economic summit meetings, see George de Menil and Anthony M.
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