The People’s Republic of China's Potential Growth Rate: The Long-Run Constraints

Juzhong Zhuang (), Matteo Lanzafame and Jesus Felipe ()

Working Papers from eSocialSciences

Abstract: In this paper People’s Republic of China’s (PRC’s) potential growth rate during the last 30 years is analysed. The PRC’s potential growth rate is not demand constrained, in particular by the balance of payments. The PRC’s potential growth rate is determined by the supply side of the economy, in particular by: (i) changes in the structure of the economy, in particular in the share of industrial employment; (ii) the working-age population; (iii) the share of net exports in gross domestic product (GDP); (iv) export growth; (v) the share of foreign direct investment (FDI) in GDP; and (vi) human capital accumulation.

Keywords: balance of payments constrained growth rate; Kalman filter; natural growth rate; Okun’s Law; People’s Republic of China; potential growth rate; supply; demand. (search for similar items in EconPapers)
Date: 2015-03
Note: Institutional Papers
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