Distorted Factor Markets, Government Intervention, and Excess Capital Accumulation: The Case of China

Tao Gu

Faculty of Economics, Meikai University, Urayasu, Japan.

DOI: 10.4236/tel.[phone]                

Abstract

This paper develops a simple growth model that embeds distorted factor markets and government intervention that achieves high economic growth, low consumption, and high investment simultaneously. All of these phenomena are consistent with Chinese macroeconomic data since the 1990s, implying the inefficiency of economic growth.

Keywords

Factor Markets, Government Intervention, Excess Capital Accumulation, Inefficiency of Economic Growth

Conflicts of Interest

The authors declare no conflicts of interest.

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