Date: 18 April 2024 (Thu)
Webinar
Webinar Series:
Capital Marketing Development: China and Asia
The Mandarin Model of Growth
18 April 2024, Thursday
10:00 am – 11:10 am, Thursday (Singapore Time, UTC+8)
[The Mandarin Model of Growth]
In China's distinct hybrid economy, the central government uses economic performance evaluations to steer the career advancement of local officials. Strong career incentives can enhance growth when local governments are constrained from using debt, but might foster short-termism and crowd out private capital otherwise. The paper develop “institutional accounting” to back out the parameters characterizing the Mandarin system and perform counterfactuals to study their effects. Strong career incentives are a major drive for China's fast growth, while reining in local government debt has a large positive effect on the long-run output. We also compare the equilibrium outcome with the Ramsey solution. Welfare implications of the Mandarin system are ambiguous.
Speaker:
Zheng (Michael) SONG, Wei Lun Professor of Economics, Head of the Department of Economics, Chinese University of Hong Kong and Senior Fellow, ABFER
Co-author:
Wei XIONG, Professor in Finance, Professor of Economics Department of Economics and Bendheim Center for Finance; Princeton University and Senior Fellow, ABFER
Discussant:
Loren BRANDT, Professor of Economics, Noranda Chair in Economics and International Trade, Economic Development of China, University of Toronto
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Event Website
https://abfer.org/events/abfer-events/webinar-series/379:webinarseries-cmd-34
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About the Webinar
Financial market development goes hand-in-hand with economic growth. The development of China's capital markets in terms of size, regulations, capability, and efficiency has been impressive. China may now even lead globally in some dimensions, notably e-payments systems. Yet, China's capital markets are still a work-in-progress facing both generic and unique challenges. Other Asian capital markets have even greater uneven development. Some in advanced Asian economies have acquired globally acclaimed reputation and capabilities while various regulatory and structural weaknesses dwarf others. Corporations and investors have been inclined to arbitrage cross-border regulatory and developmental gaps; so the very uneven status of capital markets across Asia is a policy issue for the governments in the entire region and perhaps globally. Analysing the positive and negative lessons in the functioning of Asia's capital markets, and identifying reforms and applications of technology that could further improve Asian capital markets' allocation efficiency, financial inclusion, and forewarning against reforms that might cause problems can benefit practitioners, policymakers and researchers, and can contribute significantly to overall prosperity.
The ABFER and the University of Chicago's Becker Friedman Institute China (BFI-China), in collaboration with National University of Singapore (NUS) Business School, Shanghai Advanced Institute of Finance (SAIF), The Chinese University of Hong Kong (CUHK) Department of Economics, CUHK-Shenzhen and Tsinghua University PBC School of Finance (Tsinghua PBCSF), hope to provide a virtual network to benefit researchers, policymakers, and practitioners from Asia and beyond.