Paper Title：Consumption-led Industrial Upgrading

Speaker：Prof. Xuewen Liu, University of Hong Kong

Professor Xuewen Liu is currently a full professor at HKU. Prior to joining HKU, he was an associate professor and an assistant professor at HKUST and was an assista­­­­­­­nt professor at Imperial College Business School. He obtained his Ph.D. degree at London School of Economics (LSE). Professor Liu is an economic theorist. His research areas include financial economics (corporate finance, financial markets, financial institutions, and financial crises), macroeconomics, growth and development, and Chinese economy. Professor Liu has published in leading finance and economics journals, such as Journal of Finance, Journal of Financial Economics, Review of Financial Studies, Journal of Economic Theory, Journal of Monetary Economics.

Abstract：This paper develops a macro development model for understanding the mechanisms behind industrial upgrading in a catching-up economy. Our model features hierarchical demand for consumption goods and inter-industry technological spillovers. When the market of new consumption varieties emerges, the rising demand drives the incentives of domestic innovation, resulting in technology progress and cost reduction. The cost reduction of existing varieties in turn leads to “surplus” of aggregate capital, which seeks opportunities in next new industries that produce new varieties. The dynamic feedback of “capital-push new market” and “demand pull innovation” moves the domestic technology frontier and the consumption frontier in an upward spiral, and in this process the dual-sector economic structure---the co-existence of domestic technology-mature industries and domestic technology-immature industries---evolves endogenously. A hump-shaped behavior of the savings rate arises in our model with an endogenous aggregate production function. Because of the presence of dynamic externality, the laissez-faire equilibrium is inefficient and the optimal development policy involves two-sided interventions: suppressing consumption and enhancing capital accumulation in the early stage of development while reversing the sign to stimulate consumption in a later stage.

时间：2024年5月29日 13:30-15:30

地点：半岛·体育bob官方网站805会议室