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Ben Jones

Ben Jones

Associate Professor

Management & Strategy

Ph.D., MIT, 2003
M.Phil., Oxford University, 1997
BSE, Princeton University, 1995


China: An Institutional View of an Unusual Macroeconomy
with David Dollar
November 2013

Abstract: China presents several macroeconomic patterns that appear inconsistent with standard stylized facts about economic development and hence inconsistent with the standard neoclassical growth model. We show that Chinese macroeconomic patterns instead appear consistent with an environment where state control of factor markets can promote aggressive output goals. We consider the micro-institutional features that can sustain this behavior, emphasizing the hukou system and state control over capital allocation, and present a simple model built on these features. The model can explain several puzzling facts about the Chinese economy, including its unusually low labor share and unusually high saving and investment rates. Interestingly, the model also shows that free-market reforms can initially take the economy further from global macroeconomic norms.

Paper (.pdf)






©2001 Kellogg School of Management, Northwestern University