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Conceptual and Empirical Understanding of the Dynamics of Skill Formation Jul 31, 2026

Why Lifting Birth Quotas Cannot Reverse Fertility Decline: Evidence from China's Universal Two-Child Policy Jul 29, 2026

From Free Rider to Innovator: How China Became a Global Pharmaceutical Powerhouse Jul 22, 2026

Do Industrial Policies Improve Efficiency? Evidence From China's Credit Policies Jul 14, 2026

When Cash Unlocks Mobility: China’s Shantytown Renovation Program and the Housing Markets Jul 08, 2026

From Heat to High-Tech: How Innovation Responds to Climate Change Jul 01, 2026

When Forward-Looking Accounting Meets an Unexpected Crisis: Does the Expected Credit Loss Model Amplify Economic Downturns? Jun 24, 2026

AI Patents in the United States and China: Measurement, Organization, and Knowledge Flows Jun 16, 2026

Geographic Imbalances in Access to Credit: The Roles of Branch Networks, Synergies, and Market Power Jun 10, 2026

Equity Financing and Exports: Evidence from IPO Approvals in China Jun 03, 2026

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Conceptual and Empirical Understanding of the Dynamics of Skill Formation James J. Heckman, Haihan Tian, Zijian Zhang, Jin Zhou, Jul 31, 2026 An analysis of high-frequency data from a large early childhood intervention in China documents the existence of dynamic complementarity and the emergence of new skills over the life-cycle. Dynamic complementarity is a central concept in human development. It characterizes how early learning experiences affect subsequent learning and achievement. Dynamic complementarity and its components do not operate uniformly across ages, skill levels, or ability groups. New skills emerge over the life-cycle explaining fadeout when a measuring instrument is used that does not recognize the emergence of new skills.

Why Lifting Birth Quotas Cannot Reverse Fertility Decline: Evidence from China's Universal Two-Child Policy Hanming Fang, Chang Liu, Jul 29, 2026 Drawing on nationally representative data from the 2017 China Fertility Survey and exploiting the eligibility variation created by China's Universal Two-Child (UTC) policy adopted in January 2016, we find that the policy increased births by only 0.023 per eligible woman in 2016–2017, driven almost exclusively by women who desired two or more children. County-level evidence from the 2020 population census data further shows that fertility in 2016–2020 rose primarily in places with higher average desired fertility, indicating that post-One Child Policy (OCP) China’s low fertility reflects declining demand for children rather than remaining policy constraints.

From Free Rider to Innovator: How China Became a Global Pharmaceutical Powerhouse Panle Jia Barwick, Hongyuan Xia, Tianli Xia, Jul 22, 2026 China has become a serious contender at the frontier of pharmaceutical innovation. A key policy change was the 2016 National Reimbursement Drug List, whereby the government negotiated steep price cuts in exchange for guaranteed coverage and near-universal patient access. This column shows that the reform generated both static gains from expanding patient access to existing innovative drugs, and dynamic gains from stimulating the development of the next generation of therapies. The reform policy offers rare evidence that a well-designed insurance policy can help reconcile the tension between affordability and innovation incentives.

Do Industrial Policies Improve Efficiency? Evidence From China's Credit Policies Kaiji Chen, Yuxuan Huang, Xuewen Liu, Zhikun Lu, Yong Wang, Jul 14, 2026 Are industrial policies distorting the economy, or correcting underlying distortions? Using Chinese firm-level data and a quantitative model, this article shows that preferential credit is directed toward high-markup (high-return) sectors, reallocating resources toward underfunded activities. While such policies weaken firm selection, they improve aggregate efficiency: removing them would nearly double productivity losses. The results suggest that, in a second-best environment, well-targeted industrial policies can enhance rather than reduce overall efficiency.

When Cash Unlocks Mobility: China’s Shantytown Renovation Program and the Housing Markets Zhiguo He, Zehao Liu, Xinle Pang, Yang Su, Kunru Zou, Jul 08, 2026 The household finance literature typically ignores household migration decisions and how such decisions interact with financial conditions. We find that a relaxation of borrowing constraints can facilitate household migration to higher-tier cities where borrowing constraints are more binding than in cities of origin. Such endogenous location upgrading amplifies the increase in household housing expenditures following the relaxation of borrowing constraints, as well as intercity home price disparities.

From Heat to High-Tech: How Innovation Responds to Climate Change Xianling Long, Zhiqiang Wang, Jul 01, 2026 Climate change is driving firms to innovate—not just where heat strikes, but through shifting demand across the economy. Evidence from China shows that rising temperatures stimulate both adaptation and mitigation technologies. As households, firms, and governments respond to climate risks, new market signals travel through product markets and supply chains, encouraging higher-quality climate-related innovation across sectors.

When Forward-Looking Accounting Meets an Unexpected Crisis: Does the Expected Credit Loss Model Amplify Economic Downturns? Chen Chen, Difang Huang, Jun 24, 2026 This article examines whether the expected credit loss (ECL) model, introduced to make bank provisioning more forward-looking, can inadvertently amplify downturns when a crisis arrives without warning. Using China’s staggered ECL adoption and granular loan-level data from the COVID-19 period, we show that ECL banks cut lending more sharply, raised spreads, and became more selective than incurred credit loss banks serving the same borrowers, with persistent consequences for firms.

AI Patents in the United States and China: Measurement, Organization, and Knowledge Flows Hanming Fang, Xian Gu, Hanyin Yan, Wu Zhu, Jun 16, 2026 ebates about artificial intelligence (AI) often ask whether the United States and China are technologically decoupling. Using a new high-precision measure of AI patents, we show a more nuanced picture. AI innovation in the two countries is converging in scale and technological direction, but remains highly asymmetric in institutional organization, geographic diffusion, and cross-border knowledge dependence. Chinese AI patents rely heavily on US frontier technologies, while US reliance on Chinese innovation is more limited.

Geographic Imbalances in Access to Credit: The Roles of Branch Networks, Synergies, and Market Power Victor Aguirregabiria, Robert Clark, Hui Wang, Jun 10, 2026 Concerns about unequal access to credit across regions have become central to policy debates in many economies. Financial integration does not necessarily guarantee that funds flow to areas where credit demand is highest. Instead, geographic frictions, local market power, and institutional constraints may generate persistent “credit deserts”—regions with limited access to external finance despite substantial demand for credit.

Equity Financing and Exports: Evidence from IPO Approvals in China Robin Kaiji Gong, Yao Amber Li, Stephen Teng Sun, Shang-Jin Wei, Jun 03, 2026 Access to public equity through IPOs enables Chinese exporters to expand into more foreign markets by financing the intangible investments and risk taking that bank credit alone cannot support, suggesting that well-functioning equity markets are a critical but overlooked ingredient for export-led growth in developing countries.

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Industry/Policy View China Subsidy Estimates Depend on an Interest-Rate Yardstick Yuankun Li, Jul 01, 2026 Before subsidy figures are used to justify new trade measures, the benchmark behind below-market borrowing should be made comparable across countries. The central issue is that the OECD/MAGIC treatment makes China's BMB estimate LPR-based, and this can make measured borrowing support several times larger than estimates based on more comparable interbank or government-bond benchmarks.

Human-Capital Externalities in China Edward L. Glaeser, Ming Lu, Oct 10, 2024 This paper provides evidence of heterogeneous human-capital externality using CHIP 2002, 2007, and 2013 data from urban China. After instrumenting city-level education using the number of relocated university departments across cities in the 1950s, one additional year of city-level education increases individual hourly wages by 22.0 percent, more than twice the OLS estimate. Human-capital externality is greater for all groups of urban residents in the instrumental variables estimation.

How Liberalizing Trade with China Led to a Boom in International Students in the US Gaurav Khanna, Kevin Shih, Ariel Weinberger, Mingzhi Xu, Miaojie Yu, Aug 16, 2023 Focusing on China’s accession to the World Trade Organization, we show that Chinese cities with more exposure to trade liberalization sent more students to US universities.

Regional Variation of GDP per Head within China, 1080–1850: Implications for the Great Divergence Debate Stephen Broadberry, Hanhui Guan, Sep 28, 2022 We provide the first regional breakdown of GDP per head for China from the Song dynasty to the Qing, so that regions of similar size can be compared between Europe and Asia to establish the timing of the Great Divergence of living standards.

Combating Cross-Border Externalities Shiyi Chen, Joshua Graff-Zivin, Huanhuan Wang, Jiaxin Xiong, Sep 21, 2022 China implemented a pioneering policy in 2011, the Ecological Compensation Initiative (ECI), which establishes side payments between upstream and downstream provinces in the Xin’an River Basin.

Assessing and Addressing the Coronavirus-Induced Economic Crisis: Evidence from 1.5 Billion Sales Invoice Zhuo Chen, Pengfei Li, Li Liao, Zhengwei Wang, Aug 31, 2022 We probe the effects of the COVID-19 pandemic and the subsequent containment policies on business activities in China by exploiting big data on 1.5 billion sales invoices. The average drop in sales was between 23% and 35%, depending on firm size, for the 12-week period after the Wuhan lockdown.

Industrial Land Discount in China: A Public Finance Perspective Zhiguo He, Scott Nelson, Yang Su, Anthony Lee Zhang, Fudong Zhang, Jul 25, 2022 Local governments, which serve as monopolistic land sellers in China, face a trade-off when deciding to supply residential land versus industrial land. This trade-off is determined by the different time profiles of revenues from industrial and residential land sales, local governments’ financial constraints, and the extent of local governments’ tax revenue sharing with other levels of government.

Dollar Funding Stresses in China Laura Kodres, Leslie Sheng Shen, Darrell Duffie, Jul 13, 2022 The need for US dollar funding during the financial stresses of March 2020, as the COVID-19 pandemic shocked markets, was evident in a number of countries (Avdjiev, Eren, and McGuire 2020; Bahaj and Reis 2020).

Serial Entrepreneurship in China Loren Brandt, Ruochen Dai, Gueorgui Kambourov, Kjetil Storesletten, Xiaobo Zhang, Jul 06, 2022 New firms have been an important engine of growth in the Chinese economy (Brandt, Van Biesebroeck, and Zhang 2012). Drawing on data on the universe of all firms in China, we study entrepreneurship and the creation of new firms in China through the lens of entrepreneurs who operate a series of firms over their lifetime, i.e., serial entrepreneurs (SE).

An Empirical Overview of Chinese Capital Market Grace Xing Hu, Jun Pan, Jiang Wang, Jun 29, 2022 We provide an empirical review of the Chinese capital market, focusing on the basic return and risk characteristics of its major asset classes, as well as a comparison to the US market. All major asset classes in China have significant higher volatilities than their counterparts in the US market, but they do not always yield larger returns. Small-company stocks, short-, medium-, and long-term treasury bonds outperform their US counterparts, while large stocks underperform and long-term enterprise bonds yield similar returns.

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