Does Public Infrastructure Breed Consumption Downgrade and Overcapacity in China? A DSGE Approach on Macroeconomic Effects
| Autor: | Youze Lang, Qiuyi Yang |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2019 |
| Předmět: |
Macroeconomics
Public infrastructure 020209 energy lcsh:TJ807-830 Geography Planning and Development Productive capacity lcsh:Renewable energy sources Real estate 02 engineering and technology Management Monitoring Policy and Law Downgrade public infrastructure expenditure 0502 economics and business 0202 electrical engineering electronic engineering information engineering Economics 050207 economics Productivity Dynamic Stochastic General Equilibrium (DSGE) model lcsh:Environmental sciences lcsh:GE1-350 Consumption (economics) Renewable Energy Sustainability and the Environment consumption downgrade lcsh:Environmental effects of industries and plants 05 social sciences sustainable growth Shock (economics) lcsh:TD194-195 Capacity utilization overcapacity |
| Zdroj: | Sustainability Volume 11 Issue 3 Sustainability, Vol 11, Iss 3, p 831 (2019) |
| ISSN: | 2071-1050 |
| DOI: | 10.3390/su11030831 |
| Popis: | As the most influential emerging and developing country in Asia, China has attached great importance to the construction of infrastructural facilities, laying stress on its pivotal role in sustainable growth. Recently, however, a pessimistic mood about the term “consumption downgrade” continues to emerge, ascribing the dip in people’s disposable income to real estate bubbles stemming from too much government infrastructure spending. This paper collects empirical evidence, develops a Dynamic Stochastic General Equilibrium (DSGE) framework, regards Productive Government Expenditure (PGE) as a critical endogenous variable, and investigates thoroughly its overall effects on key indicators concerning economic growth and sustainable development. Results show that household consumption indeed responds directly and negatively confronting a sudden increase of public infrastructure investment in China, yet aggregate output is instead boosted. On top of that, productive capacity does not present a supposed reduction, but a promotion under the PGE shock. These findings indicate that so-called “consumption downgrade” delivers the wrong message of weak productivity capacity utilization is in essence improved by vigorous government support for infrastructure construction, which ultimately benefits continuously-stable social sustainability in the long term. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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