1,040 research outputs found

    Regional Equality and National Development in China: Is There a Trade-Off?

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    Despite high economic growth over the past 30 years, China’s substantial and persistent regional disparities have been the subject of continuing concern to policy makers, as well as the target of a wide variety of policies. An important issue in the policy debate about whether and how best to attack these disparities is whether measures designed to improve regional equality come at a cost to national development, i.e. whether there is a trade-off between the level of national output and the equality of its distribution across the regions. There is little analysis of this issue in the literature. We help fill this gap by setting up a two-region model designed to capture some of the salient features of the Chinese economy. We subject this model to a number of policy shocks and assess the effects on regional disparities in per capita output, on the one hand, and on aggregate output on the other to investigate the trade-off. We also consider income and welfare as alternatives to output. We find that disparities in per capita output, income and welfare often move in different directions so that it is important to specify which disparity is being targeted. Moreover, since both disparities and aggregate outcomes are endogenous, how they move together depends on the nature of the shock driving the model. Thus, some policies designed to reduce disparities face a trade-off and others do not. Only a reduction in internal migration restrictions unambiguously reduces all three disparity measures and increases aggregate output, incomestock prices, output, China

    Reducing Regional Disparities in China: An Evaluation of Alternative Policies

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    Regional disparities in output per capita and income in China are large and persistent. They have been the subject of considerable concern to policy-makers at the highest level for decades, yet little is known about the effectiveness of various alternative policies which may be used to combat them. In this paper we address this issue by analysing the effectiveness of a range of policies by both regional and central governments. We use a small model with various features of the Chinese economy: two regions (the interior and the coast), two industries (agriculture and manufacturing), inter-regional capital mobility, internal migration subject to the hukou system of household registration and some features of the Chinese tax and expenditure system. The model is calibrated to Chinese data and simulated to analyse the effects of a number of policies on a range of variables but focussing on per capita output disparities and welfare. We find that a policy reducing internal migration costs is effective in reducing the per capita output gap but does so at a substantial cost to the coast. Policies which improve agricultural productivity in the interior region are most likely to both reduce the gap and make both regions better off. Changes in government consumption expenditure, central government fiscal redistributions and tax cuts, on the other hand, are less effective and have their long-run effectiveness reduced by migration.regional disparities, China, numerical modelling, hukou

    Inter-Regional Spillovers in China: The Importance of Common Shocks and the Definition of Regions

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    This paper examines the question of inter-regional spillovers in China. We argue that this is a central question in Chinese economic policy, given the marked regional disparities that exist and the concern of policy-makers to ameliorate them. We analyse this question within the framework of a six-region vectorautoregressive model which we subject to extensive sensitivity analysis, with particular attention paid to the effects on the results of strong common output movements. We find the results of dynamic simulations to be importantly dependent on model specification; in particular, they are sensitive to the order in which the variables enter the model. After an assessment of various alternatives, we are able to specify a model with tolerable robustness by using data which has been purged of the effects of national output fluctuations. We find some expected but also some unexpected results. In the first category, the Yellow River and Changjiang River regions are found to have spillover effects on other regions although they are more extensive for the former; the South Western region has no significant spillover effects on the rest of the country, consistently with the results of previous research. However, in contrast both to other research and to our expectations, shocks to the South Eastern region affect mainly the region itself with little spillover to the other regions. The same is true of the North East region while the North West region has extensive spillovers to other regions. We conclude that there is still much to be learned about the magnitude and timing of inter-regional spillovers before firm policy conclusions can be drawn.

    Regional Output Spillovers in China: Estimates from a VAR Model

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    Interregional spillover effects are central to China’s growth policy; yet relatively little is known about the strength and duration of these spillovers and whether their characteristics have changed over time. This paper examines the spillover of output between the three commonly-used regions of China: coastal, central and western regions. We find that there are strong spillovers from the coastal region to both other regions, from the central region to the western region but that shocks to the western region have no flow-on effect for the other two regions. Thus a policy of developing the coastal region is likely to indirectly benefit the other two regions.Regional Spillovers, China, regional growth

    Inter-Regional Output Spillovers in China: Disentangling National from Regional Shocks

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    This paper reports an investigation of the spillover effects of output shocks between regions in China. We use a six-region classification first suggested about two decades ago which still captures relatively homogeneous regions. The six regions are: South East, Changjiang River, Yellow River, North East, South West and North West. We start from a recent paper by Groenewold, Lee and Chen (2005b) which uses the same six regions and a vector autoregressive (VAR) framework. They find that the spillover effects are crucially dependent on the order of the variables in the model and argue that this is due to common national influences. They overcome the “ordering problem” by purging the regional outputs of their common national components using a preliminary regression of regional outputs on national output. We implement an alternative solution to the ordering problem which does not involve this two-step procedure. We proceed by including national output directly into our model. Moreover, we extend their analysis by investigating Granger causality between regional and national output measures as well as block exogeneity. Our results confirm important conclusions of the earlier paper but also raise some interesting differences.

    Complete and Consistent Chiral Transport from Wigner Function Formalism

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    Recently there has been significant interest in understanding the macroscopic quantum transport in a many-body system of chiral fermions. A natural framework for describing such a system which is generally out of equilibrium, is the transport equation for its phase space distribution function. In this paper, we obtain a complete solution of the covariant chiral transport for massless fermions, by starting from the general Wigner function formalism and carrying out a complete and consistent semiclassical expansion up to O^()\hat{\mathbf{O}}(\hbar) order. In particular, we clarify certain subtle and confusing issues surrounding the Lorentz non-invariance and frame dependence associated with the 3D chiral kinetic theory. We prove that such frame dependence is uniquely and completely fixed by an unambiguous definition of the O^()\hat{\mathbf{O}}(\hbar) correction to the distribution function in each reference frame
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