The intermittent institutional innovation and China's economic fluctuations: a calibrated model and a dynamic analysis
Purpose – China's economic transition is essentially the process of China's institutional changes. During the changes, the appearance of institutional innovation is not regular; instead, it is intermittent and random. The purpose of this paper is to show that the fitful appearance of insti...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Emerald Publishing
2022-12-01
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| Series: | China Political Economy |
| Subjects: | |
| Online Access: | https://www.emerald.com/insight/content/doi/10.1108/CPE-05-2022-0006/full/pdf |
| _version_ | 1797791584567164928 |
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| author | Ninghua Sun Lei Zeng |
| author_facet | Ninghua Sun Lei Zeng |
| author_sort | Ninghua Sun |
| collection | DOAJ |
| description | Purpose – China's economic transition is essentially the process of China's institutional changes. During the changes, the appearance of institutional innovation is not regular; instead, it is intermittent and random. The purpose of this paper is to show that the fitful appearance of institutional innovation is the root of China's economic growth and fluctuations. Design/methodology/approach – This paper constructs a real business cycle (RBC) model introducing the institutional factor expressed in the quantitative form under the dynamic stochastic general equilibrium (DSGE) framework by measuring China's institutional changes quantitatively. Findings – By comparing the characteristics of the actual economic data with those of the simulated economic data, we find that this RBC model can explain 94.44%, 66.07%, 23.46%, 21.03% and 15.45% of the cyclical fluctuations in output, investment, labor, consumption and capital, respectively. Originality/value – The impulse response analysis finds that the institutional shocks have a relatively long duration, lasting about 30 years, and decline slowly over time, while technological shocks decline relatively fast, lasting approximately ten years. |
| first_indexed | 2024-03-13T02:20:57Z |
| format | Article |
| id | doaj.art-6b94ce2f0dcc4a6fbc3d7e426f78af9e |
| institution | Directory Open Access Journal |
| issn | 2516-1652 |
| language | English |
| last_indexed | 2024-03-13T02:20:57Z |
| publishDate | 2022-12-01 |
| publisher | Emerald Publishing |
| record_format | Article |
| series | China Political Economy |
| spelling | doaj.art-6b94ce2f0dcc4a6fbc3d7e426f78af9e2023-06-30T09:41:54ZengEmerald PublishingChina Political Economy2516-16522022-12-015219621410.1108/CPE-05-2022-0006The intermittent institutional innovation and China's economic fluctuations: a calibrated model and a dynamic analysisNinghua Sun0Lei Zeng1School of Business, Nanjing University, Nanjing, ChinaDonghai Futures Research Institute, Shanghai, ChinaPurpose – China's economic transition is essentially the process of China's institutional changes. During the changes, the appearance of institutional innovation is not regular; instead, it is intermittent and random. The purpose of this paper is to show that the fitful appearance of institutional innovation is the root of China's economic growth and fluctuations. Design/methodology/approach – This paper constructs a real business cycle (RBC) model introducing the institutional factor expressed in the quantitative form under the dynamic stochastic general equilibrium (DSGE) framework by measuring China's institutional changes quantitatively. Findings – By comparing the characteristics of the actual economic data with those of the simulated economic data, we find that this RBC model can explain 94.44%, 66.07%, 23.46%, 21.03% and 15.45% of the cyclical fluctuations in output, investment, labor, consumption and capital, respectively. Originality/value – The impulse response analysis finds that the institutional shocks have a relatively long duration, lasting about 30 years, and decline slowly over time, while technological shocks decline relatively fast, lasting approximately ten years.https://www.emerald.com/insight/content/doi/10.1108/CPE-05-2022-0006/full/pdfIntermittent institutional innovationEconomic fluctuationsReal business cycle |
| spellingShingle | Ninghua Sun Lei Zeng The intermittent institutional innovation and China's economic fluctuations: a calibrated model and a dynamic analysis China Political Economy Intermittent institutional innovation Economic fluctuations Real business cycle |
| title | The intermittent institutional innovation and China's economic fluctuations: a calibrated model and a dynamic analysis |
| title_full | The intermittent institutional innovation and China's economic fluctuations: a calibrated model and a dynamic analysis |
| title_fullStr | The intermittent institutional innovation and China's economic fluctuations: a calibrated model and a dynamic analysis |
| title_full_unstemmed | The intermittent institutional innovation and China's economic fluctuations: a calibrated model and a dynamic analysis |
| title_short | The intermittent institutional innovation and China's economic fluctuations: a calibrated model and a dynamic analysis |
| title_sort | intermittent institutional innovation and china s economic fluctuations a calibrated model and a dynamic analysis |
| topic | Intermittent institutional innovation Economic fluctuations Real business cycle |
| url | https://www.emerald.com/insight/content/doi/10.1108/CPE-05-2022-0006/full/pdf |
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