Title

Rebalancing China's Economy: What Does Growth Theory Tell Us?

Jahangir Aziz

Rebalancing China's Economy: What Does Growth Theory Tell Us?

This paper uses the standard one-sector neoclassical growth model to investigate why China's consumption has been low and investment high. It finds that the low cost of capital has been quantitatively an important factor. Theory predicts that the price of capital may have been significantly...
Topics: 
Economy