In the past decade, the Chinese government was increasingly relying on revenues from land sales to finance the public spending. This paper examines the impacts of land financing on business cycle fluctuations in China in an estimated DSGE model. The simulation results indicate that the overall...

The countercyclical trade balance ratio is among the key stylized facts about open economies. The magnitude of the correlation between the trade balance and output, however, differs from country to country. In particular, the trade balance ratio is more negatively correlated with output in...