BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 20/2014:
Local government debt and economic growth in China
Yanrui Wu ()
Abstract: China’s local government debt (LGD) has recently become
the focus of economic policy debates. However, information about LGD and
its impact on economic growth in the Chinese economy is scarce. This paper
attempts to present an empirical investigation of the impact of China’s LGD
on economic growth. It is probably the first of its kind to focus on China
and thus contributes to the general literature on the relationship between
government debt and economic growth. The paper first provides an assessment
of LGD in China’s regional economies, using recently released auditing
statistics and other available secondary information. It then applies
conventional growth analysis methods to examine the impact of LGD on
regional growth in China. Various scenario and sensitivity analyses are
also conducted, to accommodate the inadequacy and potentially poor quality
of debt statistics.
Keywords: local government debt; regional growth; China; (follow links to similar papers)
JEL-Codes: H74; O11; O53; (follow links to similar papers)
26 pages, December 2, 2014
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