Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/90729
Authors: 
Mehlum, Halvor
Torvik, Ragnar
Valente, Simone
Year of Publication: 
2013
Series/Report no.: 
Memorandum, Department of Economics, University of Oslo 17/2013
Abstract: 
China's growth is characterized by massive capital accumulation, made possible by high and increasing domestic savings. In this paper we develop a model with the aim of explaining why savings rates have been high and increasing, and we investigate the general equilibrium effects on capital accumulation and growth. We show that increased savings and capital accumulation stimulates further savings and capital accumulation, through an intergenerational distribution effect and an old-age requirement effect. We introduce what we term the savings multiplier, and we discuss why and how the one-child policy, and the dismantling of the cradle-to-grave social benefits provided through the state owned enterprises, have stimulated savings and capital accumulation.
Subjects: 
China
One-child policy
Overlapping generations
Growth
Savings
JEL: 
O11
D91
E21
Document Type: 
Working Paper

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