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Price Scissors and Economic Growth: The Role of Openness
Author(s) -
He Qichun
Publication year - 2013
Publication title -
pacific economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.34
H-Index - 33
eISSN - 1468-0106
pISSN - 1361-374X
DOI - 10.1111/1468-0106.12010
Subject(s) - economics , openness to experience , exportation , china , monetary economics , macroeconomics , psychology , social psychology , geometry , mathematics , political science , law
The present paper examines how the reduction in the price scissors impacted economic development during the early stage of C hina's reform period (i.e. 1981–1998). It is found that an increase in agriculture's terms of trade had a significant complementary effect with exportation on China's economic growth. Moreover, our data supports the results of S ah and S tiglitz (1987), who suggest that a reduction in the price scissors is associated with a decrease in physical capital accumulation in an open economy.