China's M2/GDP ratio keeps rising, although it is already in the highest tier throughout the world. In this paper, we investigate empirically this puzzle using different levels of data. We first provide a quantitative approach to estimate the degree of China's excess liquidity based on...

This study examines the causes and consequences of incentive pay adoption among Chinese manufacturing firms. First, we find that a higher degree of labor scarcity encourages firms to adopt more incentive pay. Second, using an instrumental variables approach, we find that a 10 percentage point...

This study examines the causes and consequences of incentive pay adoption among Chinese manufacturing firms. First, we find that a higher degree of labor scarcity encourages firms to adopt more incentive pay. Second, using an instrumental variables approach, we find that a 10 percentage point...

This study examines the consequences of relaxing birth quotas by exploiting an exogenous two-child policy adopted by local Chinese governments on different dates. Using China's 2015 population census combined with a difference-in-differences framework, we find that the adoption of a two-child...

We develop a two-sector growth model of vertical structure in which the upstream sector features Cournot competition and produces intermediate goods that are used in the downstream sector for the production of final goods. In such a vertical structure, we show that deregulation and increased...