Simulating the impact of foreign capital in an open-economy macroeconomic model of China

Shu-ki Tsang*, Yue Ma

*Corresponding author for this work

Research output: Contribution to journalJournal articlepeer-review

6 Citations (Scopus)

Abstract

Since 1978, China's open-economy reform process has been the subject of increasing academic interest. A pioneering medium-sized econometric model is constructed using the SNA accounting framework and taking into account the stylized facts of the country's reforms and her absorption of foreign capital. In estimation, the ‘general to specific’ and error-correction modelling techniques are adopted wherever appropriate. A 50% reduction in foreign capital utilized and a total absence of flows from Hong Kong are simulated, yielding interesting insights into the operation of the opening of the Chinese economy.
Original languageEnglish
Pages (from-to)435-478
Number of pages44
JournalEconomic Modelling
Volume14
Issue number3
DOIs
Publication statusPublished - Jul 1997
Externally publishedYes

Scopus Subject Areas

  • Economics and Econometrics

User-Defined Keywords

  • China's reform
  • Error correction
  • Foreign capital
  • Open policy
  • SNA

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