Title

The Mandarin Model of Growth

Author(s)

Wei Xiong Wei Xiong (Princeton University)

Abstract

This paper expands a standard growth model to analyze the roles played by the government system in the Chinese economy, with a particular focus to include the agency problem between the central and local governments. The economic tournament among local governors creates career incentives for them to develop local economies. The powerful incentives also lead to short-termist behaviors, which explain a series of challenges that confront the Chinese economy, such as overleverage through shadow banking and unreliable economic statistics.

Creation Date

2019-09

Section URL ID

Paper Number

2019-10

URL

http://wxiong.mycpanel.princeton.edu/papers/Mandarin.pdf

File Function

Jel

E02, G18

Keyword(s)

China, Government, Standard Growth Model

Suppress

false

Series

13