The Link between Macroeconomic Adjustment and Sectoral Output in Post-Reform China
Posted: 24 Mar 2006
Abstract
We construct a two-part model of the Chinese economy. The first part consists of a money supply equation, a real money demand equation, and a savings equation. The second part comprises a set of sectoral equations. The model estimated is then used to generate a dynamic simulation of the paths of real national income, the aggregate price level, sectoral output, and sectoral prices. The model tracks quite well within sample, thus indicating that it may be used to analyze the future effects of policy changes. We therefore carry out counterfactual policy simulations based on monetary changes.
Keywords: China, Macro-adjustment, simulation
JEL Classification: E63, 021, P21
Suggested Citation: Suggested Citation
Andrew Feltenstein (Contact Author)
Georgia State University - Department of Economics ( email )
P.O. Box 3992
Atlanta, GA 30302-3992
United States
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