TY  - JOUR
AU  - Chang, Chun
AU  - Chen, Kaiji
AU  - Waggoner, Daniel F
AU  - Zha, Tao
TI  - Trends and Cycles in China's Macroeconomy
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 21244
PY  - 2015
Y2  - June 2015
DO  - 10.3386/w21244
UR  - http://www.nber.org/papers/w21244
L1  - http://www.nber.org/papers/w21244.pdf
N1  - Author contact info:
Chun Chang
Shanghai Advanced Institute of Finance
Shanghai Jiao Tong University
211 Huaihai Road, Room 507
Shanghai
China
E-Mail: cchang@saif.sjtu.edu.cn

Kaiji Chen
Emory University
1602 Fishburne Drive 
Atlanta, GA 30322-2240
E-Mail: kaiji.chen@emory.edu

Daniel F. Waggoner
Federal Reserve Bank of Atlanta
1000 Peachtree Street N.E.
Atlanta, Georgia 30309-4470
E-Mail: Daniel.F.Waggoner@atl.frb.org

Tao Zha
Department of Economics
Emory University
Rich Memorial Building
1602 Fishburne Drive
Atlanta, GA 30322-2240
E-Mail: tzha@emory.edu
M1  - published as Chun Chang, Kaiji Chen, Daniel F. Waggoner, Tao Zha. "Trends and Cycles in China's Macroeconomy," in Martin Eichenbaum and Jonathan A. Parker, editors, "NBER Macroeconomics Annual 2015, Volume 30" University of Chicago Press (2016)

M2  - featured in NBER digest on 2015-10-05
M3  - presented at "30th Annual Conference on Macroeconomics", April 17-18, 2015
AB  - We make four contributions in this paper.  First, we provide a core of macroeconomic time series usable for systematic research on China.  Second, we document, through various empirical methods, the robust findings about striking patterns of trend and cycle.  Third, we build a theoretical model that accounts for these facts.  Fourth, the model's mechanism and assumptions are corroborated by institutional details, disaggregated data, and banking time series, all of which are distinctive of Chinese characteristics. We argue that preferential credit policy for promoting heavy industries accounts for the unusual cyclical patterns as well as the post-1990s economic transition featured by the persistently rising investment rate, the declining labor income share, and a growing foreign surplus.  The departure of our theoretical model from standard ones offers a constructive framework for studying China's modern macroeconomy.
ER  -