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on China |
| By: | Kaiji Chen; Qing Wang; Tong Xu; Tao Zha |
| Abstract: | Using three unique micro datasets, we find that an unexpected and unprecedented loosening of China's LTV policy for non-primary houses fueled the entire mortgage boom during 2014Q4-2016Q3. The mortgage expansion disproportionately increased the share of mortgages to middle-aged homeowners with high education, while their consumption growth declined persistently. To interpret these empirical findings, we develop a quantitative model and identify that homeowners' trade-up of their primary homes as speculative housing investment is a key channel for a change in LTV policy to exert aggregate and distributional impacts on mortgage markets. Our cross-city evidence provides empirical support for this channel. |
| JEL: | E02 E21 E50 G11 G12 G18 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28092&r=all |
| By: | Hanming Fang; Chunmian Ge; Hanwei Huang; Hongbin Li |
| Abstract: | This paper studies how the COVID-19 pandemic has affected labor demand using over 100 million posted jobs on one of the largest online platforms in China. Our data reveals that, due to the effects of the pandemic both in China and abroad, the number of newly posted jobs within the first 13 weeks after the Wuhan lockdown on January 23, 2020 was about one third lower than that of the same lunar calendar weeks in 2018 and 2019. Using econometric methods, we show that, via the global supply chain, COVID-19 cases abroad and in particular pandemic-control policies by foreign governments reduced new job creations in China by 11.7%. We also find that Chinese firms most exposed to international trade outperformed other firms at the beginning of the pandemic but underperformed during recovery as the Novel Coronavirus spread throughout the world. |
| JEL: | F16 J2 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28072&r=all |
| By: | Chang, Pao-Li (School of Economics, Singapore Management University); Yao, Kefang (School of Economics, Singapore Management University); Zheng, Fan (School of Economics, Singapore Management University) |
| Abstract: | In this paper, we follow the micro-to-macro approach of Fajgelbaum et al. (2020) and analyze the impacts of the 2018–2019 U.S.-China trade war on the Chinese economy. We use highly disaggregated trade and tariff data with monthly frequency to identify the demand/supply elasticities of Chinese imports/exports, combined with a general equilibrium model for the Chinese economy (that takes into account input-output linkages, and regional heterogeneity in employment and sector specialization) to quantify the partial and general equilibrium effects of the tariff war at the product/sector/region/aggregate levels. This complements the studies that focus on the ex post response of the U.S. economy by Amiti, Redding and Weinstein (2019), Fajgel baum et al. (2020), and Cavallo et al. (2020). |
| Keywords: | Chinese Economy; Tariff War; Elasticity Estimation; Regional Labor Market Adjustment; Welfare Analysis |
| JEL: | F13 F14 F16 |
| Date: | 2020–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:ris:smuesw:2020_025&r=all |
| By: | Matilde Bombardini; Bingjing Li; Francesco Trebbi |
| Abstract: | In the two decades straddling China's WTO accession, the China Shock, i.e. the rapid trade integration of China in the early 2000's, has had a profound economic impact across U.S. regions. It is now both an internationally litigated issue and the casus belli for a global trade war. Were its consequences unexpected? Did U.S. politicians have imperfect information about the extent of China Shock's repercussions in their district at the time when they voted on China's Normal Trade Relations status? Or did they have accurate expectations, yet placed a relatively low weight on the subconstituencies that ended up being adversely affected? Information sets, expectations, and preferences of politicians are fundamental, but unobserved determinants of their policy choices. We apply a moment inequality approach designed to deliver unbiased estimates under weak informational assumptions on the information sets of members of Congress. This methodology offers a robust way to test hypotheses about the expectations of politicians at the time of their vote. Employing repeated roll call votes in the U.S. House of Representatives on China's Normal Trade Relations status, we formally test what information politicians had at the time of their decision and consistently estimate the weights that constituent interests, ideology, and other factors had in congressional votes. We show how assuming perfect foresight of the shocks biases the role of constituent interests and how standard proxies to modeling politician's expectations bias the estimation. We cannot reject that politicians could predict the initial China Shock in the early 1990's, but not around 2000, when China started entering new sectors, and find a moderate role of constituent interests, compared to ideology. Overall, U.S. legislators appear to have had accurate information on the China Shock, but did not place substantial weight on its adverse consequences. |
| JEL: | F13 P16 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28073&r=all |