01884cas a2200241 a 4500 AALejournalIMF007193 230101c9999 xx r poo 0 0eng d 5.00 USD 9781455262410 1018-5941 BD-DhAAL BD-DhAAL Zhang, Yuanyan. Credit Market Imperfection and Sectoral Asymmetry of Chinese Business Cycle / Yuanyan Zhang. Washington, D.C. : International Monetary Fund, 2011. 1 online resource (35 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper analyzes the role of credit market imperfection and sectoral asymmetry as a means through which shocks to the real economy are propagated and amplified. Drawing on firm-level data to calibrate the model, our simulations capture two key stylized facts of the Chinese economy: that credit constraints are more binding in nontradable sectors than in tradable industries and that output volatility is much greater in China than in industrial economies. We find that the driving force behind our simulation results is strongly related to the non-uniform nature of credit market imperfections in China and their implications for resource allocation and the way in which the economy reacts to shocks. Correctly capturing these macro-financial interactions are essential to understand the dynamic behavior of the Chinese economy. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2011/118 Full text available on IMF http://elibrary.imf.org/view/journals/001/2011/118/001.2011.issue-118-en.xml IMF e-Library