Topics in Research on China’s Macro Economy 

Hui He

07/11/2019-07/14/2019

Huazhong University of Science and Technology (HUST)

This short course is designed to bring you the frontier research on China’s macro economy since Song, Storesletten, and Zilibotti (2011 AER, SSZ hereafter). First, the stylized facts on China’s economy along four dimensions: growth, business cycles, inequality, and population aging are introduced. Second, we introduce two theoretical approach to understanding the growth and cycles in Chinese economy, namely the models in SSZ and Chang, Chen, Waggoner, and Zha (2015, NBER Macro Annual, CCWZ hereafter). Third, we will spend time to discuss the drivers behind the rapidly rising household saving rate. We then move to the study on China’s rising inequality and link it to the changing income shocks structure and deteriorating risk-sharing observed in the data. The rest of the course will focus on linking micro to macro by introducing heterogeneous agent model (HAM) and teach how to compute the HAM models. Finally, we will introduce the applications of using the HAM on China’s pension reforms and other macro issues.

Overview

Zhu, Xiaodong, 2012. “Understanding China’s Growth: Past, Present and Future,”

Journal of Economic Perspectives 26(4), pp. 103-124.

Storesletten, Kjetil, and Fabrizio Zilibotti, 2014. “China’s Great Convergence and Beyond,” Annual Review of Economics 6, pp 14.1-14.30.

Lecture 1 Stylized Facts of China’s Macro Economy

Zhu, Xiaodong, 2012. “Understanding China’s Growth: Past, Present and Future,”

Journal of Economic Perspectives 26(4), pp. 103-124.

Brandt, Loren and Xiaodong Zhu, 2010. “Accounting for China’s Growth,” Mimeo. Chang, Chun, Kaiji Chen, Daniel F. Waggoner, and Tao Zha, 2015. “Trends and Cycles in China’s Macroeconomy,” NBER Macroeconomics Annual, pp. 1-84.

Lecture 2 Understanding China’s Growth and Cycles: Theoretical Approach Song, Zheng, Kjetil Storesletten, and Fabrizio Zilibotti, 2011. “Growing Like China” American Review of Economics 101, pp 201-241.

Chang, Chun, Kaiji Chen, Daniel F. Waggoner, and Tao Zha, 2015. “Trends and Cycles in China’s Macroeconomy,” NBER Macroeconomics Annual, pp. 1-84.

Lecture 3 Understanding China’s High Saving Rate

Chamon, M. D., and E. Prasad, 2010. “Why are Saving Rates of Urban Households in China Rising?” American Economic Journal: Macroeconomics 2(1), pp. 93-130.

Curtis, C., S. Lagauer and N. Mark, 2015. “Demographic Patterns and Household Saving in China,” American Economic Journal: Macroeconomics 7(2), pp. 58-94.