AN EXPLANATION OF THE VARIABILITY OF THE ECONOMIC GROWTH RATE OF CHINA

The difference in the economic growth rate in all countries of the world and its great variability within each country are the some of the stylized growth facts that Kaldor argued [1]. China is not exempt from this type of economic regularity. Its lowest growth rate in the last 60 years was the order of -18.8% in 1961 and the highest of 15.2% in 1984 according to the database Penn World Table. The objective of the paper is to explain how variable determines the variability of the growth rate of the Chinese economy. Therefore, the Harrod growth model is used and non-parametric estimates are made as well as estimates using the ordinary least squares method and the Granger causality test. The results show that the marginal product capital ratio determines and causes the growth rate of the Chinese economy.