Lessons from studying a simple macroeconomic model for China

摘要

Updating Chow (1985, 2010), this note finds that (1) the consumption equation continues to hold but the investment equation fails; (2) the investment equation holds if investment data for 2008 and 2009 are revised downward to reflect government expenditures as a part of the stimulus package during the world economic downturn; (3) small errors in one or two observations can reverse the sign of a significant regression coefficient in econometric practice.