Credit no longer supporting Chinese growth – research
China’s economy has become “saturated with credit”, argues IMF research paper
Credit cannot effectively support further growth in the Chinese economy, recent research from the International Monetary Fund has found.
In their paper, Credit and Fiscal Multipliers in China, Sophia Chen, Lev Ratnovski and Pi-Han Tsai examine how credit growth has contributed to output growth in the country.
Using an instrumental variables approach, the authors find that, in the early years of this century, credit supported output growth in China. Their results show that between 2001 and 2008
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