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Chinese Regional Economic Growth Convergence Analysis

Author: SongYanJu
Tutor: AnLiRen
School: Northwestern University
Course: Political Economics
Keywords: Economic growth Steady state Cluster analysis Zoning structure σ- convergence β- convergence
CLC: F224
Type: Master's thesis
Year: 2006
Downloads: 634
Quote: 8
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Abstract


Neoclassical growth model that in a closed economy, due to the marginal product of capital showed a decreasing trend, economic development will eventually stabilize state (Solow, 1956), this mainly refers to the steady-state output per capita remain unchanged. When the economy is in a steady state, per capita output remains unchanged because the economy's growth rate will be zero. The process towards a steady state economy, known as the economic convergence or convergence (Convergence). If the economy is convergent in the convergence process, backward economy because of its high marginal product of capital and thus the growth rate than the developed economies are growing faster. Thus, the backward economy will catch up with the developed economies, until finally reach their steady state. Economic convergence theory not only be used to discuss whether there is convergence of economic trends, more importantly, is being used to analyze differences in regional economic growth caused by the reason. For the study of regional economic disparities, due to different scholars have used different research methods and perspectives, conclusions are often large differences and disputes, mostly concentrated in the zone (three regions) or between inter-provincial, and less Some people systematically on China's economic growth in 30 provinces differences by economic convergence in the nature of cluster analysis to study the province's regional economic differences. This paper tries to expand from two main lines and throughout the text. In the language of logical thinking, the theory of economic growth will be in the neo-classical theory, the neoclassical theory of the convergence model of econometric models to establish the basis for China's Regional Economic Growth Convergence Analysis. Of course, the entire analysis process, a main line is China's Regional Economic Growth characteristics were analyzed, including the general characteristics analysis and spatial characteristics. Another main line is to use clustering analysis method China 30 provinces (autonomous regions and municipalities) be reclassified so as to establish a new division structure, and the structure of the new divisions, respectively statistical descriptive analysis and empirical econometric analysis, but also that σ-convergence and β-convergence analysis. Main conclusions of this study are: the analysis of China's regional differences in economic growth convergence process, first, through cluster analysis to arrive at a new zoning plan, the first class area includes: Beijing, Tianjin, Liaoning, Shanghai , Jiangsu, Zhejiang, Fujian, Guangdong and Chongqing; second area includes: Heilongjiang, Shanxi, Inner Mongolia, Jilin, Shandong, Hebei, Hubei, Hunan, Hainan, Sichuan, Yunnan, Shaanxi and Ningxia; III areas include: Anhui , Jiangxi, Henan, Guangxi, Guizhou, Gansu, Qinghai and Xinjiang. Secondly, the use of the neoclassical model of economic growth on the three areas of convergence time for σ-convergence and β-convergence analysis, resulting from 1978 to 1990 were three categories of regions with significant σ-convergence trends; 1990-2004 Three categories of regions tended to significantly σ-divergence; 1978-2004 three categories of regions β-convergence trend is remarkable, although the second three weak regional trends but does not affect the overall conclusions. Phased to see the country as a whole β-convergence trend, come meet the 1978-1990 and 1978-2004 model describes the convergence trend, but from 1978 to 2004 β-convergence is not significant; addition, divergent trends in 1990-2004 significantly up. To sum up, China's regional differences in economic growth within the region converge significant, but the gap between the three regions is widening, and the widening gap between regions led to the overall gap is an important factor. To this end we introduce the regional dummy variables in the model, and thus permit

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CLC: > Economic > Economic planning and management > Economic calculation, economic and mathematical methods > Economic and mathematical methods
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