A Stylized Model of China's Growth Since 1978

45 Pages Posted: 15 Feb 2017

See all articles by Linda Glawe

Linda Glawe

FernUniversität in Hagen

Helmut Wagner

University of Hagen (Fernuniversitaet Hagen)

Date Written: February 14, 2017

Abstract

This paper develops a stylized multi-sector growth model of China’s economy. We choose a neoclassical modeling approach and focus on the reform process under Deng Xiaoping as China’s main growth driver since 1978. Following the literature, we distinguish between three major reform periods, namely the agricultural (1978-1984), the industrial (1984-1992) and the foreign-trade reform period (1992-present). Reflecting the neoclassical view, our model explains China’s growth process since 1978 by a sequence of transitory growth phases generated by the reforms. We discuss our model’s implications for China’s future growth and the middle-income trap as well as growth stimulating policies in China.

Keywords: multi-sector growth modelling, neoclassical growth theory, structural change, China, middle-income trap

JEL Classification: O10, O11, O40, O41

Suggested Citation

Glawe, Linda and Wagner, Helmut, A Stylized Model of China's Growth Since 1978 (February 14, 2017). Available at SSRN: https://ssrn.com/abstract=2917433 or http://dx.doi.org/10.2139/ssrn.2917433

Linda Glawe (Contact Author)

FernUniversität in Hagen ( email )

Universitätsstr. 11 (TGZ)
Chair of Macroeconomics
58084 Hagen
Germany

Helmut Wagner

University of Hagen (Fernuniversitaet Hagen) ( email )

Universitätsstrasse 41
Feithstrathe 140
D-58084 Hagen
Germany
011-49-2331-987-2640 (Phone)
011-49-2331-987-391 (Fax)

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