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GDP Management to Meet or Beat Growth Targets
Changjiang Lyu, Kemin Wang, Frank Zhang, Xin Zhang, Oct 24, 2018We apply the discontinuity methodology from the accounting literature to a political economy setting of GDP reporting and examine whether Chinese local governments manage regional GDP numbers. We find strong evidence of discontinuities around zero in the distribution of actual minus target GDP growth rates. The frequencies of just meeting or beating GDP growth targets are about five (four) times the frequencies of just missing targets at the prefecture (province) level. The results are stronger for governors with longer tenures and those without political connections to higher-level officials as well as for local governments with more resources under their control.
Does Spatial Misallocation in China’s Housing and Land Markets Drive Up Housing Prices?
Yongheng Deng, Yang Tang, Ping Wang, Jing Wu, Mar 23, 2022We documented pervasive spatial misallocations in the housing and land markets in China. We find larger cities with more competitive land markets and strict land supply restrictions have fewer subsidies in housing sales, and consequently a higher housing price compared to its frictionless benchmark. Removing frictions brings welfare gain because more individuals live in larger cities.
Income Inequality among Old Chinese
Katja Hanewald, Ruo Jia, Zining Liu, Oct 16, 2019Using data from the China Health and Nutrition Survey (CHNS) from 1991–2015, we decompose the income inequality among old Chinese and compare the income inequality between old households and young households. We develop an OLG model and a new empirical method to test how initial socioeconomic differences transmit to income inequality in the working years and then in old age. We find that the urban-rural gap and educational differences...
Industrial Clusters, Networks, and Resilience of Firms to the Covid-19 Shock in China
Ruochen Dai, Dilip Mookherjee, Yingyue Quan, Xiaobo Zhang, Jan 06, 2021Both entry of new firms and performance of incumbents were less adversely affected by the Covid-19 shock in Chinese counties with a greater presence of industrial clusters. To explain these results, we find evidence of the role of two specific attributes of clusters: reliance on informal hometown-based entrepreneur networks and spatial proximity to suppliers and customers.
How Credible Is Hong Kong’s Currency Peg
Urban Jermann, Bin Wei, Vivian Yue, Apr 08, 2026Using daily spot exchange rates and derivatives prices, we estimate a peg-survival probability p and an implied fundamental value of V for HKD under an alternative regime...
