It is puzzling why China has one of the highest investment rates in the world. In 1994 China introduced a new fiscal system. Using this natural experiment and the dynamic provincial panel data during the following period 1995-2002, we find that fiscal decentralization has a significant, positive...

We build a growth model with status preference to explore the effects of patent protection on innovation and social welfare. The main results are as follows. There exists a non-monotonic relationship between patent protection and innovation, and the growth-rate-maximizing degree of patent...

The last decade has witnessed a world trend of fiscal decentralization in the developing countries as an escape from inadequate growth and inefficient governance. With respect to China, fiscal decentralization has been a fundamental aspect of its transition to a market economy; and the country...

This is the date set used for Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," World Bank Economic Review, World Bank Group, vol. 10(3), pages 565-91, September. This data set is the product of a joint effort of Hongyi Li, Lyn Squire, Tao Zhang, and Heng-fu Zou...

We propose creative destruction as the channel for inflation to impact growth. The banks reap revenue from higher rates of credit growth, attracting more labor into banks and decreasing the profit of entrepreneurs. But when the revenue is achieved by issuing more credit to entrepreneurs, part of...