Lixin Colin Xu, Li Yang, 11 November 2018

The Taiping Rebellion, from 1851 to 1864, was the deadliest civil war in history. This column provides evidence that this cataclysmic event significantly shaped China’s Malthusian transition and long-term development that followed, especially in areas where the experiences that stemmed from the rebellion led to better property rights, stronger local fiscal capacity, and rule by leaders with longer-term governance horizons.  

Guangyu Cao, Ginger Jin, Xi Weng, Li-An Zhou, 09 November 2018

Positive network effects may lead to winner-takes-all in some markets. The column analyses dockless bike-sharing in China to show instead how an incumbent can benefit from positive spillovers from a competitor’s entry. In the case of bike-sharing, consumers multi-home, the market exhibits positive network effects, and investment by two firms is more cost-efficient than investment by one. 

Harald Hau, Difei Ouyang, 26 October 2018

In the new century, China’s large economy features many local real estate booms originating in insufficient land supply. Using a panel of 900,000 Chinese manufacturing firm-year observations with matched firm locations, this column quantifies the causal effects of local real estate booms on local firms. It demonstrates how the diversion of local savings into the real estate sector in cities with real estate booms exerts a large toll on other local industries through higher costs of capital, underinvestment, real wage decreases, and industrial decline.

Gail Cohen, Prakash Loungani, 23 October 2018

At first glance, emissions and economic activity appear to be positively linked. This column refutes this by re-examining emissions and real GDP data using trend/cycle decompositions. The evidence clearly demonstrates decoupling of emissions and real GDP in many richer nations. Furthermore, although decoupling does not yet appear in emerging markets, data from China show that trend elasticities initially increase with per capita real GDP but then decline, thus holding out the hope that the relationship between emissions and GDP growth will weaken as emerging market countries get richer.

Massimiliano Calì, 16 October 2018

The US-China trade war has rapidly escalated, promising to disrupt trade flows between the two countries and beyond. This column provides the first estimates of trade and investment effects of the trade war on East Asia, one of the most exposed regions. By combining trade and tariff data, it provides some order of magnitude of the expected effects and identifies the possible winners and losers from the trade war in the region.

Yi Chen, Hanming Fang, 03 October 2018

The first group of the cohorts affected by China’s ‘Later, Fewer, Longer’ campaign, which led to the rapid decline of China’s total fertility rate, are now entering their sixties. This column evaluates the long-term consequences of China’s family planning policies on the quality of life of the Chinese elderly. The results suggest that while family planning has either no effect or a slightly positive effect on elderly parents’ physical health status, parents who are more exposed to family planning policies report significantly worse mental health.

Edward Glaeser, Ming Lu, 15 September 2018

Comparing China’s per-capita GDP growth to the growth in years of schooling suggests a large role for human capital externalities. This column uses changes in the location of Chinese university departments in the 1950s to estimate that an extra year of schooling has been associated with 22.0% higher hourly wages across cities. Even so, the growth of Chinese education cannot explain the country’s massive increase in earnings.

Panle Jia Barwick, Shanjun Li, Deyu Rao, Nahim Bin Zahur, 04 September 2018

Air pollution is a serious concern for China. National levels of fine particular matter are well above recommended standards, and the average concentration across China’s thirteen largest cities is 30% higher than the national average. This column examines the relationship between health spending in China and air pollution, showing that health spending increases significantly during the two months following exposure to air pollution. A reduction of fine particular matter by about 20% from the current level could result in annual savings of 60 billion yuan in healthcare expenditure.

Zhao Chen, Zhikuo Liu, Juan Carlos Suárez Serrato, Daniel Yi Xu, 28 August 2018

Tax incentives to encourage firms to invest in R&D may also encourage firms to fraudulently relabel other expenses as R&D. The column finds that 30% of the increase in reported R&D in response to a Chinese incentive programme was due to relabelling. The size and type of tax break has a large effect on both the level of participation and the incentive to relabel.

Yi Huang, Chen Lin, Sibo Liu, Heiwai Tang, 10 August 2018

Tariffs intended to reduce competition from foreign firms can backfire by also raising the costs of imported inputs for domestic firms. This column examines the market responses to the Trump administration’s initial and subsequent announcements of tariffs on imports from China. US firms that are more dependent on exports to and imports from China experienced lower stock and bond returns but higher default risks around the date of the announcement. Firms’ indirect exposure to US-China trade through domestic input-output linkages affects their responses to the announcements. 

Mariassunta Giannetti, 02 August 2018

Some economists argue that corruption can contribute to economic growth by bypassing red tape and financing issues. Using data from China's anti-corruption campaign in 2012, Mariassunta Gianetti shows that small, young - and potentially more productive - firms tend to perform better when corruption is cut. This video was recorded at CEPR's Third Annual Spring Symposium.

Chad Bown, Eva (Yiwen) Zhang, 31 July 2018

Haichao Fan, Yu Liu, Nancy Qian, Jaya Wen, 29 July 2018

Enforcement of VAT requires accurate records of firm transactions that can be traced to both parties. This column describes how the Chinese government’s digitisation of the country’s VAT process increased enforcement, which in turn increased overall tax revenues in the short run. However, the increased enforcement caused firms to contract in the medium run, reducing the long-run gains in tax revenues.

Chad Bown, Euijin Jung, Zhiyao (Lucy) Lu, 26 July 2018

Chad Bown, Euijin Jung, Zhiyao (Lucy) Lu, 19 June 2018

Bei Qin, David Strömberg, Yanhui Wu, 25 May 2018

The Chinese government has invested heavily in surveillance systems that exploit information on social media. This column shows that these systems are very effective, even in their simplest form. From the government’s point of view, social media, although unattractive as a potential outlet for organised social protest, is useful as a method to surveil protests, monitor local officials, and disseminate propaganda.

Ashoka Mody, 01 April 2018

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