Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212815 
Year of Publication: 
2015
Series/Report no.: 
BOFIT Discussion Papers No. 5/2015
Publisher: 
Bank of Finland, Institute for Economies in Transition (BOFIT), Helsinki
Abstract: 
This paper analyses the financial distortions – growth nexus in China using a tractable general equilibrium modelling approach in which heterogeneous private and state-owned firms interact. The focal points of the model are financial frictions and reallocations of factors of production across firms. The calibrated version of the model elicits the important message that the adoption of a comprehensive financial market reform package abolishing financial distortions will lead to substantial output gains. Thus, structural policies leading to more efficient allocation of factors of production will remain a key policy challenge in China in the years to come. Publication
Subjects: 
financial distortions
financial liberalisation
general equilibrium model
China
JEL: 
C68
G10
G38
O10
Persistent Identifier of the first edition: 
ISBN: 
978-952-323-026-2
Document Type: 
Working Paper

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