Longing for economic growth without current account deficit: Chinese model

Authors

Keywords:

Economic Growth, Current Account Balance, Time-Series Analysis, Granger Causality Test, Regression Analysis

Abstract

After 1978, China implemented some reforms and branched out to foreign countries. China, applying a strategy based on export and keeping its domestic currency, Yuan, in balance during this process, has increased its economic growth. However, current value increase in dollar and global fluctuations has also affected the growth in China. Considering the fact that growth and current account balance is one of the most important variables of a nation, it is an issue of concern how the decreasing economic growth rate of China in 2015, compared to previous years, will affect the current account balance. Thereby, this study examines the effect of Chinese growth, with the application of export based industry strategy, on the current account balance between the years of 2000-2015. As a result of the study, a bidirectional relation is determined with Granger Causality Test between economic growth and current account balance. During the Regression Analysis, it is ascertained that 1% of increase in economic growth will incur 0.32% of increase in current account.

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Author Biography

Deniz Züngün, Manisa Celal Bayar University

Assist. Prof. Dr., Manisa Celal Bayar University, Ahmetli Vocational School, Department of Human Resource Management

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Published

2016-10-05

How to Cite

Züngün, D. (2016). Longing for economic growth without current account deficit: Chinese model. Journal of Human Sciences, 13(3), 3927–3938. Retrieved from https://j-humansciences.com/ojs/index.php/IJHS/article/view/4079

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Section

Economics