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Frontiers of Economics in China

, Volume 1 Issue 2

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Analysis on structural changes in the macroeconomic data series with the empirical evidence from China
LI Zinai, ZHOU Jian
Front. Econ. China. 2006, 1 (2): 155-170.
Abstract   PDF (339KB)
Analysis on structural changes in macroeconomic data series has been the key issue for studying data quality. This paper studies the structural changes in China s 36 macroeconomic time series using joint estimation model, and we find out the characteristics and movement pattern for the outliers. Our results show that most outliers show up more or less in groups, indicating that there is a significant correlation between them. The isolated outliers are not the main characteristic of China s macroeconomic time series. Nearly all the original series contain the obvious skewness and kurtosis; hence, the hypothesis of normality is significantly rejected. Most original and outlier correction series show the non-autoregressive conditional heteroskedasticity (ARCH) characteristic, but the p value for ARCH2, ARCH4, and ARCH8 is very different.
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A re-estimation of China’s agricultural surplus labor —— the demonstration and modification of three prevalent methods
WANG Jiangui, DING Shouhai
Front. Econ. China. 2006, 1 (2): 171-181.
Abstract   PDF (388KB)
The purpose of this article is to re-estimate China s agricultural surplus labor. Our estimation is based on three prevalent methods including classical, neoclassical and standard structure comparing methods. Different from other researchers, we pay attention to not only the total amount of surplus labor but also its distribution among different provinces and districts. By comparing the results from the different methods, we conclude that the classical method is the most creditable. In order to make them more reasonable, we modified the three methods. The results show that there are about 40 million agricultural surplus labor in China currently.
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Competitive advantage: an analytical framework based on entrepreneurship
LIU Zhibiao
Front. Econ. China. 2006, 1 (2): 182-195.
Abstract   PDF (362KB)
This article observes and studies the role and effect of entrepreneurship within the theoretical framework of resource-based view (RBV). It advances competitive advantage theory based on entrepreneurship by proving the distinctiveness of entrepreneurship. Distinctive cognition competence of entrepreneurs provides them with personal specific assets, which determines both the competence to explore new business opportunities and the competence to integrate resources for risk activities. The characteristics of such intangible resource as entrepreneurship, such as its distinctiveness, limitedness of competition, and incomplete mobility of factors, are the most important sources of competitive advantage of enterprises in the strategic management theory of RBV.
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Income inequality and economic growth——the Kuznets curve revisited
YIN Heng, GONG Liutang, ZOU Heng-fu
Front. Econ. China. 2006, 1 (2): 196-206.
Abstract   PDF (321KB)
In a neoclassical growth framework with a typical political-economy mechanism, this paper reexamines the relationship between the income inequality and economic growth by introducing government spending into the production function and the utility function. It demonstrates that Kuznets  famous inverted-U shape relationship between inequality and economic growth will hold the growth rate will be first increasing with the income inequality before the growth rate decreases with inequality.
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The directions of FDI and the self-intensifying expectations of the exchange rate and the effectiveness of sterilized intervention
LI Tiandong, XUE Shaoqiang, ZHU Qi
Front. Econ. China. 2006, 1 (2): 207-219.
Abstract   PDF (370KB)
In this paper, we develop the Renminbi s dynamic model to analyze the relationship between the flow directions of foreign direct investment (FDI) and the exchange rate s expectations on the basis of distinguishing the real interest rate from the desired interest rate. We find that the exchange rate expectation has a self-intensifying mechanism, which could have a reverse effect on the country s macroeconomic stabilization. We discuss the issue on how expectation impacts the macro economy and then analyze the conditions of successful intervention, which is helpful for policy management.
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The relationship between urbanization and commodity circulation: a theoretical and positive research
YAN Weilong
Front. Econ. China. 2006, 1 (2): 220-233.
Abstract   PDF (337KB)
Town  and commodity circulation are two closely interrelated concepts. A town is born through the exchange of commodities; it is formed by an increase in trade efficiency. The trade efficiency caused by the density of economy is the standard of rationalization of the town scale. The development of a town promotes the development from simple commodity circulation to developed commodity circulation, while the difference in the level of urbanization is an important reason for differences in the circulation level. Therefore, the strategy of being guided by circulation will be a basic way to push forward urbanization healthily in China.
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Determinates of the decline in the income-velocity of money in China: a new perspective
ZHAO Liuyan, WANG Yiming
Front. Econ. China. 2006, 1 (2): 256-271.
Abstract   PDF (402KB)
The income velocity of money in China has been declining since the country s reform. By studying the money demand behavior in the agricultural and non-agricultural sectors, we found that the marginal propensity to money demand is much higher in the non-agricultural sector. This implies that as the share of the agricultural sector in national income declines, monetary expansion is expected to meet not only the needs of income growth, but also the rapid structural shifts in the sectoral composition of income. Hence, non-inflationary monetary expansion is possible as development proceeds. This provides a new perspective in understanding the decline in the income-velocity of money in China.
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The approach to transforming the traditional agricultural economy: a research on the multiple paths of poverty alleviation and transformation in rural China
Front. Econ. China. 2006, 1 (2): 272-295.
Abstract   PDF (534KB)
Transforming a traditional agricultural economy into a modern economy is one of the main themes in economic development. Through theoretical and empirical analysis, this paper finds out that the key to transformation is to raise the economic value of people, to improve human capital investment and to match the stocks of physical and human capital. China s rural economy is on the edge of economic take-off, and different zones may pursue different paths for transformation. The source of rural poverty is not the scarcity of income or consumption, but the deficiency of education, social security, medical care and economic opportunity, which we define as capability poverty .
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The influence analysis on public expenditure to the technique efficiency of China
CHEN Xun, YU Jie
Front. Econ. China. 2006, 1 (2): 296-310.
Abstract   PDF (373KB)
In this paper, we use SFA to estimate the time-variant stochastic frontier model of 31 cities in China. The results tell us that raising the proportion of public expenditure in GDP can lower the technological efficiency, but raising some parts of public expenditure in GDP can promote the technological efficiency. Its realistic meaning is that it is excellent to turn the public expenditure structure to promote the technological efficiency. We computed the technological efficiency of 31 provinces/cities and the results show that the gap between the eastern region and western region is growing much. Finally, we decompose total factor productivity (TFP) and get the following result: from three regions, the biggest influence factor on technological efficiency is the scales economy. Technological progress and allocation efficiency have a smaller influence. From our results, we suggest that technological progress and allocation efficiency from public expenditure and income be raised to influence the TFP rate of change, and have a more efficient public expenditure.
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9 articles