Explaining China\u27s business cycles

Since the Communist government instituted centralized economic management and planning in the mid-1950s, the Chinese economy has gone through business cycles of sizable amplitude. The objective of this paper is to present a comprehensive explanatory framework for China’s business cycles and to reinterpret the cycles of the past four decades. The main feature of this framework is that the interaction between exogenous shocks, on the one hand, and central planners’ reaction through regulating fixed investment, on the other, generate business cycles. Exogenous shocks, whether of supply or demand, lessen or augment capacity pressure. Capacity pressure, an indicator of macroeconomic tension, rises when aggregate demand moves closer to or exceeds aggregate supply capacity, and falls otherwise. Planners react to changes in capacity pressure by adjusting the growth rate of state fixed investment. Because exogenous shocks appear continually, subsequent fluctuations in macroeconomic variables form business cycles whose core element is investment cycles. For ease of analysis, business cycles in this study are represented as recurring short-term fluctuations in the growth rate of aggregate output. The growth rate is referred to as the economic growth rate. This study covers the 1955-94 period and relies mainly on annual data. In section II and III, I review the empirical regularities in China’s short-term macroeconomic behavior and the existing hypotheses about business cycles. My explanatory framework for China’s business cycles is introduced in Section IV. The dynamic property of China’s business cycles is investigated through a series of simulations in Section V. A chronological review of business cycles based on the explanatory framework follows n Section VI. The main findings are summarized in the final section

Structural transformation and economic growth in Hong Kong : another look at young\u27s a tale of two cities

Young (A Tale of Two Cities, 1992 and the Tyranny of Numbers, 1995) demonstrated, based on the data from the 1960s to the 1980s, that the total factor productivity (TFP) growth since the mid-1980s owed much to the establishment of the cross-border division of labor in which Hong Kong relocated manufacturing to the Mainland and provided support and entrepot trade services in the form of service exports. Nevertheless, growth since the 1980s came largely from the declining manufacturing sector. The expanding services sector’s TFP growth, whether tradable or not, has been low. Hong Kong’s annual TFP growth rate dropped below one percent during the 1991-97 period. As a result of the decelerating demand growth for Hong Kong’s service exports since the mid-1990s as well as the greatly reduced manufacturing sector’s size, a fall of Hong Kong’s long-term output growth rate appears to be unavoidable

Design of Dynamic Deadbeat Controllers Using an Observer or a Dual Observer in Discrete Time Linear Multivariable Systems

This paper considers the problem of designing the minimum time dynamic deadbeat controllers, using an observer or a dual observer. As a preliminary, optimal controller and observer are defined and obtained. Then, the existence of a dynamic deadbeat controller is examined, and a separation theorem is proved. This theorem states that the minimum time dynamic deadbeat controller is given by the optimal controller combined with the optimal observer. These results are dualized to yield the corresponding result in the case of using the dual observer, i.e., the result on the minimum time dual deadbeat controller. Finally, a method is presented for finding reduced order controllers by applying the results on linear function observers

An Application of Self-Tuning Regulator to GLA system of an Aircraft

In this paper, a Self-Tuning Regulator (STR), one of the adaptive control strategies, is applied to the GLA system of a large civil aircraft. Two types of STR are introduced. For Algorithm 1, the restriction that the number of the inputs must be equal to that of the outputs is imposed. On the contrary, for Algorithm 2, this restriction is released. These two algorithms are applied to alleviate the gust response of aircrafts, firstly a rigid aircraft and secondly a flexible one. In consequence of simulations, it is found that the STR can alleviate the gust response of aircrafts favorably. A STR is more effective to alleviate response to a discrete gust than to a continuous gust. In spite of the inaccurate estimation of system parameters, the STR works well. Generally, the proposed STR's show better performance for a rigid aircraft than for a flexible one. However, even for the latter, by choosing initial values of parameters appropriately, we can get good results

Growth-inflation tradeoff in China

The high growth and wide fluctuations of fixed investment are the main driving forces of the rate of inflation in China in the reform period. Investment expansion generates strong demand pressures in the consumption goods market. Its inflationary impact is magnified further as it brings about higher wage costs during a boom. An implied short-run tradeoff is derived from dynamic simulation of a small macroeconomics model. In a given year, each additional percentage point of economic growth or investment growth leads to, respectively, a 2.7 or a 0.9 percent increase in the rate of inflation that year

Hong Kong\u27s inflation under the U.S. dollar peg : the Balassa-Samuelson effect or the Dutch disease?

Despite establishing the U.S. dollar peg in 1983, Hong Kong’s annual rate of inflation during the 1985-96 period was 4.3% higher than that of the U.S. The Dutch disease is found to be the main reason for Hong Kong’s high long-term rate of inflation. The Balassa-Samuelson effect contributed relatively little. From the 1980s, the relocation of Hong Kong manufacturing to southern China generated strong demand for Hong Kong’s tradable services to support the industrial activity in the mainland and subsequently raised the process of tradable services in Hong Kong. Growing wage costs and consumption demand, which accompanied the boom led by export of services, also brought about high prices in nontradables

The labor income tax equivalent of price scissors in pre-reform China

The government in a centrally planned economy can raise investable resources through price and wage manipulation. By treating price and wage controls as an implicit form of labor income taxation. I have assessed the scale of resource transfers from households to the government in pre-reform China. From the observed rise of the labor income share in the non-agricultural sector output resulting from price and wage liberalization since 1979, the implicit tax revenue during the 1964-78 period is assessed as 10.1 % of GDP. According to estimates based on a two-sector model, this implicit labor income tax led to implied reduction of 33.1% and 36.7% respectively, in the price of agricultural goods and in the non-agricultural-sector nominal wage during the 15-year period. The equivalent average labor income tax rates were 18.2% and 21.1% for agricultural and non-agricultural sector workers of the time

N=1{\cal N}=1 superfield description of BPS solutions in 6D gauged SUGRA with 3-branes

We provide ${\cal N}=1$ superfield description of BPS backgrounds in six-dimensional supergravity (6D SUGRA) with 3-branes, which is compactified on a two-dimensional space. The brane terms induce the localized fluxes. We find a useful gauge in which the background equations become significantly simple. This is not the Wess-Zumino gauge, and the relation to the usual component-field expression of 6D SUGRA is not straightforward. One of the equations reduces to the Liouville equation. By moving to the Wess-Zumino gauge, we check that our expressions reproduce the known results of the previous works, which are expressed in the component fields. Our results help us develop the systematic derivation of four-dimensional effective theories that keeps the ${\cal N}=1$ SUSY structure.Comment: 32 pages, no figures, published versio

Genome-Wide Association Study of Coronary Artery Disease

Coronary artery disease (CAD) is a multifactorial disease with environmental and genetic determinants. The genetic determinants of CAD have previously been explored by the candidate gene approach. Recently, the data from the International HapMap Project and the development of dense genotyping chips have enabled us to perform genome-wide association studies (GWAS) on a large number of subjects without bias towards any particular candidate genes. In 2007, three chip-based GWAS simultaneously revealed the significant association between common variants on chromosome 9p21 and CAD. This association was replicated among other ethnic groups and also in a meta-analysis. Further investigations have detected several other candidate loci associated with CAD. The chip-based GWAS approach has identified novel and unbiased genetic determinants of CAD and these insights provide the important direction to better understand the pathogenesis of CAD and to develop new and improved preventive measures and treatments for CAD