Causal relationships among economic aggregates in China

Abstract
Using China's macro data from 1952 to 1989, the stationarity and causality tests to two types of economic aggregates are applied. The first type relates to the conventional money, income and consumption relationship; and the other is associated with the interest rate, money and investment/income relationship as embodied in a financial repression model. Stationarity test results show that a different direction of causality exists when different measurement of price is used. A causal relationship between interest rate, money and investment/income is also found.

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