The purpose of this paper is to highlight a version of the Balassa-Samuelson effect for emerging countries with a new dataset. More than the catching-up effect, we will measure the convergence for three emerging countries: Brazil/China/India. We will compare the convergence between these...

Over the last decade, a growing body of literature dealing with the phenomenon of the "middle-income trap" (MIT) has emerged. The term MIT usually refers to countries that have experienced rapid growth and thus reached the status of a middle-income country (MIC) in a very short period of time,...

Market frictions prevent the efficient allocation of factors of production, slow down structural transformation and lead to costs in terms of lower output and aggregate total factor productivity (TFP). We use a theoretical framework developed by Aoki (2012) featuring sector-specific frictions on...

This paper re-examines the long-run causal relationship between military expenditure and economic growth in China over the period 1952–2010. An empirical econometric analysis based on a Barro-style growth model is conducted. By employing the Bartlett corrected trace test, which provides better...

This paper studies two striking stylized facts about China's reform: that the output growth in the early stage of the reform is mainly due to productivity growth, and that the income inequality is increasing over time. This paper is a preliminary attempt in understanding these two facts in an...

This paper develops a stylized multi-sector growth model of China's economy. We choose a neoclassical modeling approach and focus on the reform process under Deng Xiaoping as China's main growth driver since 1978. Following the literature, we distinguish between three major reform periods,...

Over the last decade, a growing body of literature dealing with the phenom-enon of the "middle-income trap" (MIT) has emerged. The term MIT usually refers to countries that have experienced rapid growth and thus reached the status of a middle-income country (MIC) in a very short period of time,...

The development of the service sector in the People's Republic of China has not kept pace with the country's overall economic development. The share of employment in services is still lagging behind that of output and is also below the international norm. Moving from traditional services to...

Over the last decade, a growing body of literature dealing with the phenomenon of the “middle-income trap” (MIT) has emerged. The term MIT usually refers to countries that have experienced rapid growth and thus reached the status of a middle-income country (MIC) in a considerably short...

Views of the future China vary widely. While some believe that the collapse of China is inevitable, others see the emergence of a new economic superpower that increasingly poses a threat to the U.S. This paper examines the economic growth prospects of China over the next two decades....