The 7th International Workshop on NSE held during December 12-15 has successfully concluded. This Workshop, hosted by the Institute of New Structural Economics (INSE) at Peking University, was on the theme of Experiences of Economic Transition in the Past 40 Years in the World. Nearly 50 worldwide frontier scholars got together to exchange their research ideas and findings on four main subjects including technological change and economic growth of China, openness and economic growth, political economy and economic reforms, and financing industrial upgrading in transition and emerging economies.
Opening Speech
On December 12, Professor Justin Yifu Lin presented his research entitled "Structural Endogeneity and Modern Economics in Developing Countries" in the opening session of this conference. He briefly retrospected the process of structural changes in developing countries and pointed out that though developing countries have huge advantages and potential, most of them have been trapped in low-income or middle-income status, on which he researched in this paper. He stressed that the new structural economics offers many new theoretical insights and is a gold mine for theoretical and empirical. Yong Wang, Academy Deputy Dean at INSE and Secretary-General of New Structural Economics Research Consortium, chaired the opening session.
Session A
Session A of the conference, chaired by Lijun Zhu, Assistant Professor at INSE, focused on technological change and economic growth of China. Three papers were discussed in this session.
Giammario Impullitti, Professor at University of Nottingham, opened the session with a paper entitled "Innovation Union: Cost and Benefits of Innovation Policy Coordination". The paper showed large heterogeneity in innovation policy and performance between old and new EU member states and presented firm-level evidence on the close link between foreign direct investment (FDI) spillovers and eastern European firms' innovation. Jake Zhao, Assistant Professor at Peking University HSBC Business School held discussion on this paper. Wei You, Assistant Professor at INSE, presented a paper on "The Welfare Implications of Internal Migration Restrictions". This paper used a dynamic spatial equilibrium model to study the high internal migration restrictions in China and predicted the influence of eliminating Hukou restriction and suggested that policy should incentivize large cities to accommodate an even larger population. Jingting Fan, Assistant Professor at the Pennsylvania State University held discussion on this paper. Santiago Levy, President of Latin American and Caribbean Economic Association and Member of the Academic Advisory Council of INSE, delivered a presentation about his paper "Misallocation and Dysfunctional Firm Dynamics in Mexico, 1998-2013". This paper studied the increasing misallocation of physical and human capital resources and its influence and pointed out that the policy feature of Mexico is a good perspective for further studies. Rongsheng Tang, Assistant Professor of Shanghai University of Finance and Economics held discussion on this paper.
Section B
On December 13, Yong Wang, Academic Deputy Dean at INSE, and Mingzhi Xu, Assistant Professor at INSE chaired the Session B, which examined openness and economic growth. Four papers were discussed in this session.
Charles Jones, STANCO 25 Professor of Economics at Stanford University and Member of the Academic Advisory Council of INSE, delivered a presentation on "The End of Economic Growth? Unintended Consequences of a Declining Population". Professor Jones discussed the unintended consequences on economic growth of a declining population and his comments on a recent book, Empty Planet. He thought that fertility considerations may be more important than we thought. Sina T. Ates, Senior Economist at Federal Reserve Board, held discussion on this paper. Then Sina T. Ates delivered a presentation on "Innovation and Trade Policy in a Globalized World" which tried to answer how import tariffs and R&D subsidies help domestic firms compete globally and how these policies affect aggregate growth and economic welfare. The paper also discussed the influence of protectionist and R&D subsidy in globalization governing. Jie April Cai, Assistant Professor at Shanghai University of Finance and Economics held discussion on this paper. Haochen Zhang, PhD student at INSE, delivered a presentation on "Agglomeration Economies, Factor Endowment, and Local Economic Development: Evidence from China’s Early-Stage Industrial Investment". The paper used the evidence from China’s early-stage industrial investment to study agglomeration economies, factor endowment, and local economic development. It also studied China’s special features of the early-stage investment and its long-term impacts as well as the important role of CA in the formation of industrial agglomeration. Kent Zhao, Assistant Professor at Xiamen University held discussion on this paper. Lijun Zhu, Assistant Professor at INSE, delivered a presentation on "Growing through Competition: The Reduction of Entry Barriers among Chinese Manufacturing Firms". This paper studies the pro-competitive effect of firm entry in the context of China's economic reform after private entrants were gradually allowed in. The paper revisited the influence of gradual economic reform in China. Charles Jones, Professor at Stanford University held discussion on this paper.
Session C
On December 13th morning and evening, Jianye Yan, Associate Professor at INSE, chaired Session C, which focused on political economy and economic reforms. five papers were discussed in this session.
Haipeng Xing, Associate Professor at the State University of New York at Stony Brook, opened the session with a presentation themed "Endogenous Structural Transformation in Economic Development", Richard Rogerson, Professor at Princeton University, held discussion on this paper. Yong Wang, Academic Deputy Dean at INSE, presented a paper themed "Endowment Structure and Role of State in Industrialization and Reforms", which developed a toy model to illuminate the conflicting and complicated issues of structural transformation hotly debated in the development literature and political science. Jing Hang, Assistant Professor at Sun Yat-sen University, Richard Rogerson, Professor at Princeton University and Keun Lee, Professor of Economics at Seoul National University and Member of the Academic Advisory Council of INSE joined a lively discussion afterwards. Caihui Fu, Researcher at INSE, presented his research themed" A Theory of Optimal (Cobb-Douglas) Production Function: from Neoclassical Economics to New Structural Economics", and analyzed the rational choice of the (aggregate) Cobb-Douglas production function. Shuzhen Yang, Assistant Professor at Shandong University and Bo Zhang, Professor at Peking University, held discussion on this paper. Ruixue Jia, Associate Professor at University of California at San Diego, presented a paper themed "Entrepreneurial Reluctance: Academic Talent and Firm Creation in China", Ying Bai, Assistant Professor at Chinese University of Hong Kong, held discussion on this paper. Vladimir Popov, Principle Research Fellow at Russian Academy of Sciences, concluded the session with a presentation themed A "Myth of Soft Budget Constraints in Socialist Economies" to explore soft budget constraints in socialist economies. Zhiyun Li, Assistant Professor at Durham University, held discussion on this paper.
Session D
On December 14, Jiajun Xu, Executive Deputy Dean and Assistant Professor at INSE, chaired Session D that focused on financing industrial upgrading in transition and emerging economies. Four papers were discussed in this session.
Franklin Allen, Professor at Imperial College Business School, delivered a presentation on "Dissecting the Long-Term Performance of the Chinese Stock Market. In this paper, Professor Allen studied China’s underperformance of the A-share market, problems with the IPO process and delisting process for China's tech giants and the low returns on Chinese A share stocks. Bo Hu, Assistant Professor at INSE, held discussion on this paper. Stephany Griffith-Jones, Executive Director of the Initiative for Policy Dialogue at Columbia University and Member of the Academic Advisory Council of INSE, delivered a presentation on "National Development Finance in Middle-Income Countries: The Role of National Development Banks". The presentation focus on the importance of National Development Banks. Junhee Han, Post-doctor at INSE held discussion on this paper. Thorsten Beck, Cass Business School in London delivered a presentation on "Liquidity Creation, Investment, and Growth". This paper focused on liquidity creation and banks and provided new ideas on the function of banks. Di Gong, Assistant Professor at University of International Business and Economics, served as discussant. Jiajun Xu, Assistant Professor at INSE, delivered a presentation on "Effective Development Banking: Loans versus Guarantees" This paper focused on how to maximize the development impact of National Development Banks and the advantages of Loans and Guarantees. Zhao Li, Lecturer at University of International Business and Economics, held discussion on this paper.
Professor Justin Yifu Lin thanked all participants for a fruitful conference in his concluding remarks, while he keenly looked forward to collaborating with fellow researchers in the coming years to further the research in structure and structural transformation.
Third Academic Advisory Council Meeting
INSE held its third Academic Advisory Council Meeting on December 15th. Yong Wang, Academic Deputy Dean at INSE and Secretary-General of New Structural Economics Research Consortium, chaired the meeting. After a brief welcome remark by Professor Justin Yifu Lin, Yong Wang illustrated the Institute’s future plans and academic accomplishments in the past five years. Jiajun Xu, Executive Deputy Dean at INSE, introduced policy practice progress of the institute. Members of the Academic Advisory Board then offered insightful suggestions for the future development of the Institute.
The Academic Advisory Council of INSE, composed of internationally-renowned scholars and experts, meets annually and provides advice on INSE's research activities. Attendees this year included Michele Boldrin, Joseph Gibson Hoyt Distinguished Professor in Arts & Sciences at Washington University in Saint Louis; Ha-Joon Chang, University Reader at University of Cambridge; Gene M. Grossman, Jacob Viner Professor of International Economics at Princeton University; Charles Jones, STANCO 25 Professor of Economics at Stanford University; Joseph Kaboski, David F. and Erin M. Seng Foundation Professor at University of Notre Dame; Keun Lee, Professor of Economics at Seoul National University; Santiago Levy, President of Latin American and Caribbean Economic Association; Kiminori Matsuyama, Professor of Economics at Northwestern University; Celestin Monga, Visiting Professor at Harvard University and Roger Myerson, Nobel Prize Laureate and David L. Pearson Distinguished Service Professor of Global Conflict Studies at University of Chicago. Stephany Griffith-Jones, Executive Director of the Initiative for Policy Dialogue at Columbia University and Ping Wang, Seigle Family Professor at Washington University, offered suggestions via email.