Potential output in a rapidly developing economy: the case of China and a comparison with the United States and the European Union

Jinghai Zheng, Angang Hu, Arne Bigsten

Research output: Contribution to journalArticlepeer-review

19 Citations (Scopus)

Abstract

The authors use a growth accounting framework to examine growth of the rapidly developing Chinese economy. Their findings support the view that, although feasible in the intermediate term, China's recent pattern of extensive growth is not sustainable in the long run. The authors believe that China will be able to sustain a growth rate of 8 to 9 percent for an extended period if it moves from extensive to intensive growth. They next compare potential growth in China with historical developments in the United States and the European Union. They discuss the differences in production structure and level of development across the three economies that may explain the countries' varied intermediate-term growth prospects. Finally, the authors provide an analysis of "green" gross domestic product and the role of natural resources in China's growth. © 2009, The Federal Reserve Bank of St. Louis.
Original languageEnglish
Pages (from-to)317-342
Number of pages26
JournalFederal Reserve Bank of St. Louis Review
Volume91
Issue number4
Publication statusPublished - Jul 2009

ASJC Scopus subject areas

  • Business and International Management

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