China¡¯s Growth Slowdown: Labor Supply, Productivity, or What?

Anping Chen and Nicolaas Groenewold ()
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Nicolaas Groenewold: Economics Programme, UWA Business School, University of Western Australia, Perth, WA 6009, Australia

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2021, vol. 16, issue 1, 35-66

Abstract: There has been much discussion of the sources of China¡¯s growth slowdown but little formal econometric analysis of this question. Chen and Groenewold (2019) show that the slowdown was primarily supply-driven, but they stopped short of identifying specific supply variables. This paper extends their analysis and distinguishes several potential supply components: labor supply, productivity, and capital accumulation. Our results confirm their main conclusion that supply dominates the explanation of the slowdown. A model with two supply factors (labor supply and productivity) reveals that both components contribute to the slowdown, although productivity makes the greater contribution. However, when capital stock is added to the model, the decline in the capital accumulation rate becomes an important factor in the growth slowdown, to some extent replacing the effects of both labor supply and productivity.

Keywords: growth; slowdown; supply factors; labor supply; productivity; capital accumulation (search for similar items in EconPapers)
JEL-codes: E17 F47 O47 O53 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:fec:journl:v:16:y:2021:i:1:p:35-66

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