Effects of Government Regulation of Diesel and Petrol Prices on GDP Growth: Evidence from China

Markus Brueckner, Haidi Hong and Joaquin Vespignani
Authors registered in the RePEc Author Service: Markus Brueckner

ANU Working Papers in Economics and Econometrics from Australian National University, College of Business and Economics, School of Economics

Abstract: This paper presents estimates of the effects that government regulation of diesel and petrol prices has on GDP growth. Theory suggests that when supply curves are convex, a decrease in the regulatory price has a larger effect on output than a tantamount increase. Motivated by this theoretical insight, we specify VAR models with asymmetric effects of positive and negative changes in the regulatory prices of diesel and petrol. We estimate the VAR models on quarterly data from China’s national accounts during the period Q1 1998 to Q4 2018. Our main findings are that: (i) negative growth rates of regulatory diesel and petrol prices significantly reduce GDP growth; (ii) positive growth rates of regulatory diesel and petrol prices have a positive, but quantitatively small and statistically insignificant effect on GDP growth.

Keywords: GDP growth; energy price regulation (search for similar items in EconPapers)
JEL-codes: E60 (search for similar items in EconPapers)
Date: 2023-04
New Economics Papers: this item is included in nep-cna, nep-ene and nep-reg
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cbe.anu.edu.au/researchpapers/econ/wp690.pdf (application/pdf)

Related works:
Working Paper: Effects of Government Regulation of Diesel and Petrol Prices on GDP Growth: Evidence from China (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:acb:cbeeco:2023-690

Access Statistics for this paper

More papers in ANU Working Papers in Economics and Econometrics from Australian National University, College of Business and Economics, School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by ().