Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212693 
Year of Publication: 
2011
Series/Report no.: 
BOFIT Discussion Papers No. 5/2011
Publisher: 
Bank of Finland, Institute for Economies in Transition (BOFIT), Helsinki
Abstract: 
We construct a small-scale dynamic stochastic general equilibrium (DSGE) model that features price rigidities, habit formation in consumption and costs in capital adjustment, and calibrate the model with data for the Chinese economy. Our interest centers on the impact of technology and monetary policy shocks for different structures of the Chinese economy. In particular, we evaluate how a rebalancing of the economy from investment-led to consumption-led growth would affect the economic dynamics after a shock occurs. Our findings suggest that a rebalancing would reduce the volatility of the real economy in the event of a technology shock, which provides support for policies aiming to increase the consumption share in China.
Subjects: 
DSGE
rebalancing
monetary policy shocks
technology shocks
China
JEL: 
E52
E60
Persistent Identifier of the first edition: 
ISBN: 
978-952-462-700-9
Document Type: 
Working Paper

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