Credit and fiscal multipliers in China: Evidence from a political economy based estimation

• Published in: Journal of international money and finance Vol. 119; p. 102481
• Main Authors: Chen, Sophia, Ratnovski, Lev, Tsai, Pi-Han
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01.12.2021
• Subjects: China; Credit Growth; Credit Policy; Fiscal Stimulus; Multiplier; R12; Fiscal Stimulus; China; G21; H20; Multiplier; Credit Growth; Numbers: E63; Credit Policy

•Subnational political cycles influence fiscal and credit policies in China.•The tenure of the party secretary, and the conditions in peer provinces, instrument for provincial fiscal expenditure and credit.•We estimate an on-budget fiscal multiplier of 1.0 and a credit multiplier of 0.2 during 2000–...