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Effects of agricultural production fluctuations on the Chinese macroeconomy
Author(s) -
Ran Guanghe,
In Francis,
Dillon John L.
Publication year - 1995
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/j.1574-0862.1995.tb00351.x
Subject(s) - economics , agriculture , variance decomposition of forecast errors , china , granger causality , industrial production , investment (military) , production (economics) , consumption (sociology) , agricultural productivity , vector autoregression , agricultural economics , measures of national income and output , lag , macroeconomics , econometrics , geography , archaeology , computer network , social science , sociology , politics , political science , computer science , law
Based on a macro‐model framed in terms of China's agricultural, industrial, government and household sectors, this paper aims to identify the effects of agricultural production fluctuations on the Chinese macroeconomy over the period 1949–89. Using annual national time‐series data, Granger‐causality tests indicate that fluctuations in China's agricultural production have been a statistically significant cause of changes in other types of Chinese macroeconomic activity. Impulse response analysis shows that shocks in China's agricultural production were followed by analogous responses in national consumption, industrial output, investment, exports and income which peaked with a two‐year lag and vanished after 6 years. Variance decomposition analysis indicates that changes in China's agricultural production were the most important determinant of changes in the level of national consumption and the second most important determinant of changes in the level of industrial production, national investment, exports and national income.