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on Transition Economics |
| By: | Hongyi Chen (Hong Kong Institute for Monetary Research); Ran Li (Bank for International Settlements); Peter Tillmann (Justus-Liebig-University Giessen) |
| Abstract: | This paper studies whether monetary transmission in China is asymmetric. While researchers found an asymmetric transmission in the U.S. and other economies, China offers a specific rationale for asymmetries: the presence of state-owned enterprises (SOEs) enjoying preferential access to financing. To study the consequences of SOEs for policy transmission, we differentiate between expansionary and restrictive policy shocks and argue that SOEs should suffer less from a policy tightening and benefit more from a policy easing. Based on sector-specific macroeconomic time series and a large firm-level data set, we provide evidence of a systematic and sizable asymmetry in the transmission of monetary policy shocks in China. The nature of the asymmetry is consistent with the notion of explicit or implicit government-guarantees of SOEs and has consequences for the adjustment of aggregate variables. In contrast to other central banks, the People’s Bank of China seems to be able to “push on a string”. |
| Keywords: | monetary transmission, state-owned enterprises, financial system, VAR, state-dependent local projections, firm-level data |
| JEL: | E32 E44 G32 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201806&r=tra |
| By: | Jan Bruha; Michal Hlavacek; Lubos Komarek |
| Abstract: | In this paper, we investigate whether movements in property prices have detectable effects on Czech households' consumption and saving decisions. We concentrate on three episodes of movements in house and apartment prices and ask whether property owners have significantly different consumption and saving choices from households living in rented properties. We found that, on average, property owners tend to have a lower propensity to consume and a higher saving rate independently of whether property prices move up or down. This casts doubts on the strength of the collateral channel linking the housing market to the macroeconomy in the Czech Republic. |
| Keywords: | Consumption and saving decisions, property prices |
| JEL: | D12 D14 E21 R31 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:wpaper:2017/11&r=tra |
| By: | Vladimir Gligorov (The Vienna Institute for International Economic Studies, wiiw); Doris Hanzl-Weiss (The Vienna Institute for International Economic Studies, wiiw); Tomáš Holub; Ivan Mikloš |
| Abstract: | Graph of the month Real GDP growth rate in the Czech Republic and Slovakia, in %, 1989-2017 (p. 1) Opinion corner Is the separation of Czechoslovakia a success story? (by Ivan Mikloš; pp. 2‑4) Two states that are no more (by Vladimir Gligorov; pp. 5-8) Catching-up process 25 years since the ‘Velvet Divorce’ (by Tomáš Holub; pp. 9-16) Twenty-five years of structural change (by Doris Hanzl-Weiss; pp. 17‑22) The editors recommend for further reading (p. 23) Statistical Annex Monthly and quarterly statistics for Central, East and Southeast Europe (pp. 24‑45) Index of subjects (p. 46-47) |
| Keywords: | real GDP growth, disintegration, catching-up, economic reforms, principle of self-determination, fiscal federalism, role of the EU, price and wage levels, real exchange rates, economic structure, structural change, FDI |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:wii:mpaper:mr:2018-01&r=tra |
| By: | Jin Liu; Bingdong Hou; Xiao-Wei Ma; Hua Liao |
| Abstract: | Indoor air pollution is mainly caused by solid fuel use for cooking in developing countries. Many previous studies focused on its health risks on the children and in specific local area. This paper investigates household energy usage and transition for cooking in rural China and the health effects on the elderly. A national large-scale dataset CHARLS (China Health and Retirement Longitudinal Study) covering 450 villages and communities is employed. Logit regressions were used to quantitatively estimate the effects, after controlling for some factors such as income, demographic and geographical variables. The results robustly show that compared to non-solid fuels, solid fuel use significantly increases the possibility of chronic lung diseases (30%), exacerbation of chronic lung diseases (95%), seizure of heart disease (1.80 times), and decreases self-evaluated health status of the elderly (1.38 times). Thus, it is urgent to improve clean energy access for cooking in rural China. |
| Keywords: | indoor air pollution; household solid fuel; health risks; elderly; rural; China |
| JEL: | Q54 Q40 |
| Date: | 2018–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:biw:wpaper:111&r=tra |
| By: | Arnaud Dupuy (CREA, Université du Luxembourg) |
| Abstract: | This paper develops a model encompassing both Becker's matching model, and Tinbergen-Rosen's hedonic model. We study its properties and provide identification and estimation strategies. Using data on internal migration in China, we estimate the model and compute equilibrium under counter-factual alternatives to decompose the migration surplus. Our findings reveal that about 1/5 of the migration surplus of migrant women is generated in the marriage market and 3/5 in the labor market. We also find that the welfare of urban men married with a migrant wife would have been 10% lower had their migrant wives not entered the urban marriage market. |
| Keywords: | Sorting in many local markets, marriage market, hedonic and matching models. |
| JEL: | D3 J21 J23 J31 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:18-06&r=tra |
| By: | Sally Chen; Joong Shik Kang |
| Abstract: | Strong Chinese output growth after the Global Financial Crisis was supported by booming credit. This credit boom carries risks. International experience suggests that China’s credit growth is on a dangerous trajectory, with increasing risks of a disruptive adjustment and/or a marked growth slowdown. Several China-specific factors—high savings, current account surplus, small external debt, and various policy buffers—can help mitigate near-term risks of a disruptive adjustment and buy time to address risks. But, if the risks are left unaddressed, these mitigating factors will likely not eliminate the eventual adjustment, but make the boom larger and last longer. Hence, decisive policy action is needed to deflate the credit boom safely. |
| Keywords: | Financial crises;Financial cycles;Banking crises;Asia and Pacific;credit gap, debt overhang, sustainable growth, General |
| Date: | 2018–01–05 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:18/2&r=tra |
| By: | Elton Beqiraj (University La Sapienza); Giovanni Di Bartolomeo (University La Sapienza); Marco Di Pietro (University La Sapienza); Carolina Serpieri (European Commission - JRC) |
| Abstract: | The recent financial crisis had serious worldwide impacts. Initial resilience and good past performances led to the illusion that the Central and Eastern European (CEE) region was able to decouple from developments in advanced economies. This initial illusion was however immediately denied since the crisis spread to that region just with a lag. The CEE region was, in fact, suddenly placed at the epicenter of the emerging market crisis. Further, the consequences of the crisis were not uniform among countries of the CEE region. Strong cross-country disparities in the resistance and recovery capacities have been observed. Focusing on a CEE sub-region, the Central Europe and the Baltics (CEB), our research project aims to analyze and disentangle the resilience performance to the 2008 financial crisis within countries of this region according to their shock isolation and absorptive capacities. We develop a new methodology to investigate two important dimensions of resilience, namely recovery and resistance. The latter can be defined as the relative vulnerability or sensitivity of economies within CEB region to disturbances and disruptions, whereas the former is the speed and extent of recovery from such a disruption or recession. Our methodology is based on Bayesian estimation techniques for general equilibrium models. We build and estimate a DSGE model for a small-open economy, which features nominal wage and price rigidities, as well as financial frictions in the form of liquidity-constrained households and limited access to deposits for the bank system. Then we group our parameter estimates in two sets: structural parameters and stochastic structure. The former individuates the deep parameters affecting the economic recovery capacities after stochastic disturbances (innovations) occur; the latter governs the innovation distributions and their intrinsic persistence. Accordingly, we study the relative differences across CEB economies using Principal Component Analysis (PCA), obtaining synthetic orthogonal indexes of these differences in a parsimonious way. Finally, we use the two sets to compare the relative recovery (resistance) country performances of a single country to those of a hypothetical economy characterized by a CEB average structural (stochastic) set of estimated parameters. Precisely, considering estimated parameters as variables of a cross-sectional dataset organized by country, we first look at national differences considering as reference a hypothetical country, where there are no distortions and/or unaffected by disturbances; second we use, as reference, a hypothetical average country, built on the estimated parameter means. |
| Keywords: | resilience, DSGE model, financial frictions, Bayesian estimation, principal component analysis, CEE region. |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc109632&r=tra |
| By: | Giancarlo Corsetti (Centre for Economic Policy Research (CEPR); Centre for Macroeconomics (CFM); University of Cambridge); Meredith Crowley (Centre for Economic Policy Research (CEPR); University of Cambridge); Lu Han (University of Cambridge); Huasheng Song (Zhejiang University) |
| Abstract: | We develop a new empirical framework to analyse destination-specific markup and quantity adjustments to bilateral exchange rates by exporters. The framework offers two methodological innovations. First, we develop an unbiased estimator of the markup elasticity that correctly isolates marginal costs in large unbalanced panels where the set of markets served by firms varies endogenously with currency movements. Second, we exploit Chinese linguistics to process characters recorded in Chinese custom forms to build a novel, general, product classification distinguishing high and low differentiation goods|which we can use to proxy for exporters' market power. Applying this framework to exporters from China over 2000-2014, we document substantial heterogeneity in destination-specific markup elasticities across product classes and firm types. Conditional on a price change, the average markup elasticity for highly differentiated consumption goods is 32%; markup adjustments explain three quarters of incomplete pass through into import prices for these goods. In contrast, the average for low-differentiation intermediates is only 5%, suggesting that pricing for these goods responds to global, rather than local, economic conditions. Markup elasticities are higher for both state-owned and foreign-invested enterprises than for private enterprises, which, on average, pursue aggressively competitive strategies throughout our sample. |
| Keywords: | Exchange rates, Pricing-to-market, Product classification, Differentiated goods, Market power, Markup elasticity, China |
| JEL: | F31 F41 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:cfm:wpaper:1803&r=tra |
| By: | Zheng Michael Song; Wei Xiong |
| Abstract: | Motivated by growing concerns about the risks and instability of China’s financial system, this article reviews several commonly perceived financial risks and discusses their roots in China’s politico-economic institutions. We emphasize the need to evaluate these risks within China’s unique economic and financial systems, in which the state and non-state sectors coexist and the financial system serves as a key tool of the government to fund its economic policies. Overall, we argue that: (1) financial crisis is unlikely to happen in the near future, and (2) the ultimate risk lies with China’s economic growth, as a vicious circle of distortions in the financial system lowers the efficiency of capital allocation and economic growth and will eventually exacerbate financial risks in the long run. |
| JEL: | E00 E02 G00 G01 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24230&r=tra |
| By: | Petr Vanek (Department of Finance, Faculty of Business and Economics, Mendel University in Brno); Petr Korab (Department of Finance, Faculty of Business and Economics, Mendel University in Brno) |
| Abstract: | The paper investigates the motives of deposit and credit euroisation in Eastern Europe employing Bayesian empirical methodology. We analyse a unique dataset of macroeconomic fundamentals, perception surveys, and institutional quality indicators and deal with the uncertainty in the model by Bayesian model averaging. Apart from traditional fundamental factors, strong institutions are found to be an important driver of both credit and deposit euroisation. Business regulation, corruption environment, administrative costs and country-specific risk impact borrowing and saving behaviour in EURO and should be reflected in designing de-euroisation policies in the region. |
| Keywords: | Euroization, Bayesian model averaging, currency substitution, foreign currency borrowing, institutional quality |
| JEL: | E51 F02 P24 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:men:wpaper:73_2018&r=tra |
| By: | Perrotta Berlin, Maria; Qin, Bei; Spagnolo, Giancarlo |
| Abstract: | Fostering whistleblowing through leniency and asymmetric sanctions is regarded as a potentially powerful anti-corruption strategy in the light of its success in busting cartels. The US Department of Justice started a pilot program of this kind in 2016. It has been argued, however, that introduced in China in 1997, these policies did not help against corruption. We map the evolution of the Chinese anti-corruption legislation and aggregate enforcement data, documenting a large and stable fall in prosecuted cases after the 1997 reform. The fall is consistent with reduced corruption detection, but under specific assumptions also with improved deterrence. To resolve the ambiguity, we collect and analyze a random sample of case files from corruption trials. Results point indeed at a negative effect of the 1997 reform on corruption detection and deterrence, but plausibly linked to its poor design: contrary to what theory prescribes, it increased leniency also for bribe-taking bureaucrats that cooperate after being denounced, enhancing their ability to retaliate against whistleblowing bribe-givers. |
| Keywords: | Corruption; Leniency; Deterrence; China |
| JEL: | K14 N45 P37 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12634&r=tra |
| By: | Smriti Sharma; Finn Tarp |
| Abstract: | Using novel data from micro, small, and medium firms in Viet Nam, we estimate the relationship between behavioural and personality traits of owners/managers—risk attitudes, locus of control, and innovativeness—and firm-level decisions. We extend the analysis beyond standard metrics of firm performance such as revenue and growth to study intermediate investments, including product innovation, worker training, and adoption of workplace safety measures that are potentially conducive to observed firm performance. Our results show that innovativeness and locus of control are positively correlated with revenue while risk aversion predicts lower revenue. Risk aversion is positively correlated with the adoption of safety measures. Innovativeness, as expected, is associated with an increased probability of product innovations. An internal locus of control predicts higher probability of investments, innovations, and worker training. Heterogeneity analyses indicate that innovativeness and risk aversion matter more for firm outcomes in provinces characterized by better business climate. Our results are robust to a variety of checks. We contribute to a nascent and rapidly growing literature on the importance of managerial capital by shedding light on the role of managerial personality characteristics for decision-making in firms in a dynamic transition economy. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2018-17&r=tra |
| By: | Maria Carvalho; Antoine Dechezleprêtre; Matthieu Glachant |
| Abstract: | China dominates the global solar photovoltaic (PV) value chain, while 15 years ago the demand and supply were located in few Western economies. In this process, the PV industry has seen a booming demand, drastic price decreases along the supply chain, and fierce competition among surviving companies. This paper seeks to understand how this spatial shift has occurred and its drivers, with a specific focus on the role of intangible assets and intellectual property. |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:wip:wpaper:40&r=tra |
| By: | Jingwen Wu; Bingdong Hou; Ruoyu Ke; Yun-Fei Du; Ce Wang; Xiangzheng Li; Jiawei Cai; Tianqi Chen; Meixuan Teng; Jin Liu; Jin-Wei Wang; Hua Liao |
| Abstract: | Solid fuels are still widely used in rural China though the living standard has improved greatly. Energy poverty is an obvious indicator of poverty, which has serious effect on economic development, environment and health. In this paper, we conducted a detailed analysis on fuel choice and usage behavior of different end-use activities in rural residential energy consumption. Using 717 household observations from a micro survey data in two counties of Shandong and Hebei province in 2016, we find that biomass is the dominant fuel used for cooking among all energy sources despite of obvious trend of decrease in recent years, accounting for 44%. Clean energy used to cook increased markedly with a proportion of nearly 50%. Biomass is also the ordinary fuel used for water heating excerpt for solar energy. Almost 90% households rely on coal for space heating in winter, and one-third households have space heating less than 2 months. Ownerships of home appliances for basic needs is higher than that for hedonistic needs, and usage behaviors of some appliances are economical. Fuel accessibility of commercial energy has improved noticeably in rural, and the high proportion usage of biomass is affected by family income, using habits, local resources, environmental recognition, education and age. Since solid fuels are widely used in rural, it is important to cleanse biomass, develop new energy, and improve residents¡¯ cognition about the consequences of using solid fuels. |
| Keywords: | rural households; fuel choice; end-use; usage behaviors |
| JEL: | Q54 Q40 |
| Date: | 2018–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:biw:wpaper:109&r=tra |
| By: | Bingdong Hou; Xin Tang; Chunbo Ma; Li Liu; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology); Hua Liao |
| Abstract: | Unclean cooking fuel is widely used in the developing world, and it is the main indication of energy poverty in rural China. In this paper, we investigate the situation, transition, and determination of fuel choice in China's rural household cooking. Using the large scale micro-survey data of China Health and Retirement Longitudinal Study (CHARLS), we find that there is a big gap in using commercial cooking fuels between rural and urban households: 60% of the rural households adopt traditional biomass resource as their main fuel for cooking in 2011, while this figure is less than 5% in the urban. We also identify a significant spatial divide in fuel choice: in southeastern coastal areas, about 40% of the rural households prefer solid fuels, while this figure jumps to over 80% in northeastern areas. The longitudinal data also reveal a significant transition from traditional to modern fuels from 2008 to 2012. Moreover, the distance to the most commonly used farmer's market, education background, coal price and female labor participation are all influential in determining the households' choices. |
| Keywords: | cooking fuel; solid fuel; household; energy poverty; rural China |
| JEL: | Q54 Q40 |
| Date: | 2018–01–02 |
| URL: | http://d.repec.org/n?u=RePEc:biw:wpaper:110&r=tra |
| By: | Zhe Chen; Yoshinori Kurokawa |
| Abstract: | Using Chinese firm-product data from 2000 to 2006, this paper empirically tests whether the appreciation (depreciation) of China's yuan weakens (strengthens) the effect of trade liberalization on the extensive margin of China's exports to 170 countries. Based on regressions, we have four main empirical findings. First, reductions in tariffs, charged by China's trade partners, increased China's exporter numbers and export value/quantity per exporter at the product level, whereas the appreciation (depreciation) of China's yuan caused a decrease (increase)--the effect of exchange rates is larger than that of tariffs in all cases. Second, reductions in tariffs, charged by trade partners, increased the entry and exit of China's exporters, and yuan appreciation (depreciation) decreased (increased) them. Third, the effects of tariffs and exchange rates are significantly different between processing and ordinary trade firms. Fourth, the significance of the effects is greater if the export destinations are non-OECD countries. |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:tsu:tewpjp:2018-001&r=tra |
| By: | Chia-Lin Chang (Department of Applied economics, Department of Finance National Chung Hsing University, Taiwan.); Te-Ke Mai (Department of Economics National Tsing Hua University, Taiwan.); Michael McAleer (Department of Quantitative Finance National Tsing Hua University, Taiwan and Econometric Institute Erasmus School of Economics Erasmus University Rotterdam, The Netherlands and Department of Quantitative Economics Complutense University of Madrid, Spain And Institute of Advanced Sciences Yokohama National University, Japan.) |
| Abstract: | The purpose of the paper is to provide a clear mechanism for determining carbon emissions pricing in China as a guide to how carbon emissions might be mitigated to reduce fossil fuel pollution. The Chinese Government has promoted the development of clean energy, including hydroelectric power, wind power, and solar energy generation. In order to involve companies in carbon emissions control, a series of regional and provincial carbon markets have been established since 2013. Since China’s carbon market was established in 2013 and mainly run domestically, and not necessarily using market principles, there has been almost no research on China’s carbon price and volatility. This paper provides an introduction to China’s regional and provincial carbon markets, proposes how to establish a national market for pricing carbon emissions, discusses how and when these markets might be established, how they might perform, and the subsequent prices for China’s regional and national carbon markets. Power generation in manufacturing consumes more than other industries, with more than 40% of total coal consumption. Apart from manufacturing, the northern China heating system also relies on fossil fuels, mainly coal, which causes serious pollution. In order to understand the regional markets well, it is necessary to analyze the energy structure in these regions. Coal is the primary energy source in China, so that provinces that rely heavily on coal receive a greater number of carbon emissions permits from the Chinese Government. In order to establish a national carbon market for China, a detailed analysis of eight important regional markets will be presented. The four largest energy markets, namely Guangdong, Shanghai, Shenzhen and Hubei, traded around 82% of the total volume and 85% of the total value of the seven markets in 2017, as the industry structure of the western area is different from that of the eastern area. The China National Development and Reform Commission has proposed a national carbon market, which can attract investors and companies to participate in carbon emissions trading. This importantissue will be investigated in the paper. |
| Keywords: | Pricing chinese carbon emissions, National pricing policy, Energy, Volatility, Energy finance, Provincial decisions. |
| JEL: | C22 C58 G12 Q48 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:ucm:doicae:1803&r=tra |
| By: | Francesco D’Acunto; Daniel Hoang; Michael Weber |
| Abstract: | Unconventional fiscal policy uses announcements of future increases in consumption taxes to generate inflation expectations and accelerate consumption expenditure. It is budget neutral and time consistent. We provide preliminary evidence for the effectiveness of such policies using changes in value-added tax (VAT) and household survey data for Poland. We find households increased their inflation expectations and willingness to purchase durables before the increase in VAT. Future research has to ensure income, wealth effects, or intratemporal substitution channels cannot explain these results and ideally exploit exogenous variation in VAT in a fixed nominal interest rate environment. |
| JEL: | D12 D84 D91 E21 E31 E32 E52 E62 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24244&r=tra |
| By: | Petr Huber (Austrian Institute for Economic Research (WIFO) and Faculty of Business and Economics, Mendel University in Brno.); Josef Montag (International School of Economics, Kazakh-British Technical University and Department of Economics, Mendel University in Brno) |
| Abstract: | We study whether the positive effects of homeownership on political participation and social capital, found in developed market economies, extend to post-communist countries. We find that homeownership is strongly related to higher participation in local-level and national elections. In post- communist countries, homeownership is also related to higher social trust. However, the positive association between homeownership and volunteering found in developed market economies does not extend to post-communist countries. Together, our results corroborate that homeownership is associated with positive social benefits. However, these effects are highly heterogeneous and context- dependent. |
| Keywords: | Homeownership, social capital, political participation, post-communist countries |
| JEL: | D62 D72 P14 P26 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:men:wpaper:74_2018&r=tra |
| By: | Dagmara Nikulin (Gdansk University of Technology, Gdansk, Poland); Maciej Berêsewicz (Poznañ University of Economics and Business, Centre for Small Area Estimation, Statistical Office in Poznañ, Poznan, Poland) |
| Abstract: | The main goal of our article is to bridge the gap in the regional analysis of informal employment in Poland and in particular to indicate the propensity for informal work in the working age population, to test if informal activities are typical for marginalized people (less educated, unemployed, older) and to identify the regional and spatial heterogeneity in the propensity. We use data from the ‘Human Capital Balance 2010-2014’ survey. Results indicate a strong relationship between the probability of informal work and age, sex and labour force status. Moreover, a strong spatial dependency can be observed. |
| Keywords: | Informal employment propensity, unregistered work, shadow economy, spatial Bayesian analysis, INLA |
| JEL: | J21 R12 R23 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:gdk:wpaper:47&r=tra |
| By: | Hua Liao; Celio Andrade; Julio Lumbreras; Jing Tian |
| Abstract: | Cities contribute to most of the CO2 emissions. And the economic system at city level is much complex due to various linkaged sectors. This paper aims to analyze the economy-wide contribution of sectors and households to CO2 emissions in Beijing (China) by utilizing a semi-closed input-output model integrated with a modified hypothetical extraction method. Results show that, compared with 2005, in 2012 (1) within the entire economic system, interprovincial export caused the largest amount of CO2 emissions [135.50 million tons (Mt)] with the main contributions arising from manufacturing (42.12 Mt); transportation, storage, and post (TSP in short, 29.13 Mt); and urban households (23.57 Mt); (2) across the intermediate input-output system, real estate activities accounted for the largest amount of embodied CO2 intensity (0.07 kg per yuan) and more sectors outsourced CO2; (3) tracing the integrated sector network, CO2 linkages pointed to manufacturing and TSP dominating the internal linkages, manufacturing prominent in mixed linkages, secondary industry leading the net forward linkages, and tertiary industry dominant in terms of net backward linkages, helping control CO2 according to its origin; (4) CO2 emissions induced by household strikingly affected total CO2 emissions in Beijing, mainly coming from income-oriented affects, with a large rural-urban disparity and a similar sectoral distribution pattern. Finally, we propose suggestions on carbon reduction in terms of technological interlinkages, final demand and household participation. |
| Keywords: | CO2 emissions; Semi-closed input-output model; Modified hypothetical extraction method; City; Beijing |
| JEL: | Q54 Q40 |
| Date: | 2018–01–05 |
| URL: | http://d.repec.org/n?u=RePEc:biw:wpaper:113&r=tra |
| By: | Noëmi, Lisack (Bank of England) |
| Abstract: | This paper studies the impact of credit sector reforms in a general equilibrium framework where heterogeneous firms choose their optimal investment and how to finance it. Besides retained earnings and bank loans, I focus on the crucial role played by alternative sources of funding, including family, friends, non-listed equity and informal banking institutions. While small young enterprises face important difficulties to finance their investment, these alternative financing sources allow them to partially bypass credit constraints. The model can account for the financing patterns observed in Chinese data. Despite an increase in non-performing loans by 11%, liberalizing the banking sector increases the steady-state aggregate level of capital by 10% and the steady-state aggregate production by 5%, inducing efficiency gains and a welfare increase of 1.8%. Selectively tightening the regulation of the alternative finance sector, if simultaneous to bank liberalization, may prevent the rise in non-performing loans while preserving most welfare improvements. This remains however detrimental to the development of small, young enterprises and limits efficiency gains. |
| Keywords: | Informal finance; banking reform; heterogeneous agents; credit constraints; China |
| JEL: | E22 O16 O17 |
| Date: | 2017–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0694&r=tra |