Deakin University
Browse

File(s) under permanent embargo

Do permanent shocks explain income levels? a common cycle-common trend analysis of regional income levels for China

journal contribution
posted on 2008-12-01, 00:00 authored by Paresh Narayan, S Narayan
In this paper, we analyse per capita income levels of China's three main regions: the western region, the eastern region and the central region using common cycle and common trend tests. Our main contribution is that we impose the common cycle and common trend restrictions in decomposing shocks into permanent and transitory components. We find that: (i) there is evidence for two cointegrating relationships and one common cycle; and (ii) the variance decomposition analysis of shocks provides evidence that over short horizons, permanent shocks play a large role in explaining variations in regional per capita incomes.

History

Journal

Pacific economic review

Volume

13

Issue

5

Pagination

656 - 662

Publisher

Wiley-Blackwell Publishing Asia

Location

Richmond, Vic.

ISSN

1361-374X

eISSN

1468-0106

Language

eng

Publication classification

C1 Refereed article in a scholarly journal

Copyright notice

2008, Blackwell Publishing Asia Pty Ltd