CHINA'S ECONOMIC GROWTH: WHAT DO WE LEARN FROM MULTIPLE-BREAK UNIT ROOT TESTS?

This paper investigates China's economic growth by performing multiple-break unit root tests on the data of national and sectoral output and output per worker to identify their steady-state and transitional growth paths. The evidence generated suggests that the growth behaviour of the Chinese economy is consistent with endogenous growth theory. The results of multiple-break unit root tests are then explained within the endogenous growth framework, using historical observations on how the evolution of economic institution/environment causes changes in some institutional parameters and hence in the steady-state growth rate of GDP per worker. Copyright (c) Scottish Economic Society 2005.