Structures Investment and Economic Growth: A Long-term International Comparison

Ball, Michael; Morrison, Tanya; Wood, Andrew

doi:10.1080/0042098966565

Cited by 16 publications

(8 citation statements)

References 11 publications

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“…see Blomström et al (1996) and Ball et al (1996). Ball et al (1996) and Blomstrom et al (1996) 6 .Interestingly, the test results that investment growth might be led by economic growth seem corroborative to the neoclassical investment theory. This also implies that the old investment-driven-growth regime has been largely phased out at the macro level by reforms.…”

supporting

confidence: 59%

“…see Blomström et al (1996) and Ball et al (1996). Ball et al (1996) and Blomstrom et al (1996) Let us now examine whether the two pairs of variables are also contemporaneously interdependent. A simple two-equation VAR (vector autoregression) system is set up for this purpose.…”

Section: What Do Data Tell Us About the Investment-gdp Nexus?mentioning

confidence: 99%

“…To answer this question, we employ the commonly used method of Granger causality test, e.g. see Blomström et al (1996) and Ball et al (1996). Ball et al (1996) and Blomstrom et al (1996) 6 .…”

Section: What Do Data Tell Us About the Investment-gdp Nexus?mentioning

confidence: 99%

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How much does investment drive economic growth in China?

Qin

Cagas

Quising

et al. 2006

Journal of Policy Modeling

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Investment-driven growth has long been regarded as a key development strategy in China. This paper investigates empirically the validity of this view. Post-1990 data analyses and macroeconometric model simulations show that market demand has become a regular force in driving investment since reforms, that non-demand-driven investment growth contributes to increasing capital-output ratio far more than output growth, that government investment exerts a pivotal role in amplifying investment cycles, albeit effective in promoting employment, and that delayed and rising consumption from current investment surge can help sustain the impact of growth even with constant-returns-to-scale in the long-run GDP.Key words: Investment, growth, impulse response function, cointegration, Granger non-causality JEL classifications: E22, E62, R34, O23, P41 * Contacting author; email: d.qin@qmul.ac.uk . 1By three methods we may learn wisdom: first, by reflection, which is noblest; second, imitation, which is easiest; and third by experience, which is the bitterest. Confucius I. Another East Asian 'Miracle'?The spectacular growth of China over the last two decades apparently adds significant force to the East Asian 'Miracle'. 1 During the period 1990 -2003, China's growth has been averaging 9.3% in terms of GDP per annum while the accompanying rate in gross fixed capital formation (GFCF) is 14% and the rate of the total investment in fixed assets (TIFA) is 15%. 2 Today, GFCF accounts for over 40% of nominal GDP, as compared to less than 30% in the early 1980s, see Table 1.1. These records have definitely outperformed those of Japan and the US and many other Newly Industrialized Asian Economies (NIAEs), see In 2004, the startling acceleration of the TIFA -43.2% growth in the 1 st quarter and 33.3% in the 2 nd quarter 3 before settling down to 27.6% for the full year -has led the Chinese government to curtail fixed assets investment out of the grave concern that the rising investment would overheat the economy. The rapid investment expansion has caused severe shortage in energy and raw material supplies, pushed imports to grow faster than exports, and accelerated inflation. The investment price index rose to 5.6% and the 1 The East Asian 'Miracle' refers to the myth that the engine driving economic growth is essentially capital accumulation instead of total factor productivity growth, see e.g. (Young 1995) and (Senhadji 2000). 2 The TIFA is more often used than the GFCF in China, as it is published monthly and more timely than GFCF. Both GFCF and TIFA are deflated by the price index of fixed assets from the China Statistical Yearbook 2004 for the period [1991][1992][1993][1994][1995][1996][1997][1998][1999][2000][2001][2002][2003]. The price index of raw materials and energy is used for 1990 as the price index of fixed assets is unavailable that year. 3 All the statistics quoted are y-o-y rates. The view that the Chinese economy is an investment-driven economy is a legacy from the old regime of a centrally planned economy (CP...

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supporting

confidence: 59%

Section: What Do Data Tell Us About the Investment-gdp Nexus?mentioning

confidence: 99%

See 1 more Smart Citation

How much does investment drive economic growth in China?

Qin

Cagas

Quising

et al. 2006

Journal of Policy Modeling

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“…Ball et al (1998) show that new commercial property cycles have a duration of 10 years, and are independent of the business cycle in the UK. Employing the Kalman Filter technique and cross-country data, Ball et al (1996Ball et al ( , 1999, discover significant long cycles of new construction, with periodicity of 20-30 years (so-called ''Kuznets cycles'') in both residential and non-residential real estate markets. 41 The NBER monograph by Gottlieb (1976), is perhaps the most systematic analysis of the cycles in the real property market.…”

Section: Housing ''Long Cycles''mentioning

confidence: 99%

Macroeconomics and housing: a review of the literature

Leung

2004

Journal of Housing Economics

267

163

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“…WHEATON (1987) discovered that the cycle of offices is approximately 10 years. Basically, cycles, from the viewpoint of macroeconomics, can be differentiated between the Kondratjew cycle, lasting 48-60 years (KONDRATJEW 1926); Kusnetz cycle, 18-25 years (BALL, WOOD 1999;BALL, MORRISON, WOOD 1996); Judging cycle, 7-11 years (DIETRICH 1999); and Kitchin cycle, 3-5 years (GAIDOSCH 2007). From the microeconomic point of view, differences in the real estate market lie in the four markets, i.e.…”

Section: Cycle Of the Real Estate Marketmentioning

confidence: 99%

Cyclicity Of Housing Markets Under The Specific Condition Of The Existence Of A Bubble In The Real Estate Market

Weise

Philips

Hochheim

2015

Real Estate Management and Valuation

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In recent years, real estate bubbles have been commonplace in housing markets all over the world. That´s why we examine the relation between housing prices during bubbles in 101 cities located in ten different countries, aiming to explain the housing market cycle during a housing bubble, using economic and housing indicators. We obtained data on eight variables used in market cycle analysis which may be able to explain the existence of speculation and the ideal market cycle. The obtained resultsshow that many of economic and housing indicators begin to decrease while housing prices peak. Only the quantity of transactions peaks during the following year. We also observed that a housing bubble can follow three different scenarios, i.e.: the bubble does not burst, or can burst with a slow decline or sudden and rapid collapse. Finally, it is possible to determine that the same variables can provide clear insight into a bubble in the real estate cycle.

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Structures Investment and Economic Growth: A Long-term International Comparison

Cited by 16 publications

References 11 publications

How much does investment drive economic growth in China?

How much does investment drive economic growth in China?

Macroeconomics and housing: a review of the literature

Cyclicity Of Housing Markets Under The Specific Condition Of The Existence Of A Bubble In The Real Estate Market

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