This thesis aims to study the macroeconomic performance of China. China has been experiencing rapid economic growth and it has been changing gradually from a planned to a market economy since it initiated the well known “open door policy” combined with a “coastal development strategy” in 1978. However, rapid growth has occurred on the background of increasing regional disparity. Meanwhile, unemployment has increased significantly during last two decades, and has become one of the most pressing problems of the Chinese economy today. Moreover, another major challenge facing the Chinese economy is how to deal with various shocks, and to ensure the sustainability and balance of economic growth in the face of the increasing economic uncertainties associated with its deep reform and integration into the world trade and financial system. Based on the above concerns and literature review, this study, firstly, uses an augmented Solow-Swan model of Mankiw, Romer and Weil (1992) to assess the role FDI plays in underlying regional differences in economic growth across Chinese provinces over the reform period 1978-2008. My analysis indicates that the augmented Solow growth model appears to provide a good description of regional growth patterns in China over the period 1978-2008 and the data display conditional convergence. After controlling for FDI and other determinants of growth, provinces that were initially poor tend to grow faster and the evidence in favour of conditional convergence becomes even stronger after splitting the data into subsamples. I then focus on the study of the relationship between unemployment and growth at both national level and regional level in order to find out how unemployment affects China’s economic growth and economic reform progress overall. I find that Okun’s relationship does not hold in China universally and, furthermore, the nature of the observed relationship has changed during the transition progress. I argue that there are hump shaped relationships both between growth and unemployment and between the speed of transition and unemployment in China. The results are consistent with several theoretical and empirical studies in the literature. Finally, structural VAR methodology pioneered by Bayoumi and Eichengreen (1993) is used to identify and decompose supply and demand shocks to two variables, (the log of) output (annual real GDP) and (the log of) prices (annual GDP deflator). I then compute and discuss the correlation of such shocks across provinces and show how it has evolved over the four main sub-periods of China’s history. Moreover, I investigate which factors contribute to economic integration or divergence in the Chinese economy.

Taking GDP growth and inflation as endogenous variables, this paper employs a Structural VAR from Baumeister and Hamilton (2015, 2019) to identify aggregate demand and aggregate supply shocks for Bhutan, focusing on the COVID-19 pandemic. The results suggest that 94 percent of the GDP growth plunge in 2020 is attributable to a fall in aggregate supply. The higher inflation during the COVID-19 pandemic in 2020 also implies a negative supply shock. Although the magnitudes differ, characterizing the COVID-19 pandemic in Bhutan as a supply shock coincides with preceding episodes that were also primarily driven by supply shocks.

The following is a study of the impact of migration on unemployment rates for natives in Sweden, on municipal level. A cross sectional data set has been analyzed using multiple linear regressions. The regression analysis has searched for the impact on the unemployment rates among natives of the size of the share of migrants in the municipalities as well as of the change in the size of the share of migrants during a time span of 13 years. The results show that migration has small or non-existent impact on the unemployment rates of natives. The results vary depending on the period being investigated and also depending on the characteristics of the municipality that is investigated. When dividing the municipalities into three categories (city, urban and rural municipalities) significant impact of migration on native’s unemployment rates is to be found in city and urban municipalities, but not in rural. The results also indicate that the most significant impact is to be found in the present period of time, while in the long term the impact diminishes to become less significant or not significant at all. 10% migrants in a city municipality in 2015 increased natives’ unemployment level that same year by 0.4 percentage units. More rapid increases of the share of migrants in the labor force have more impact as well. A municipality were the share of migrants grew with 1 percentage unit between 2003 and 2015, had 0.1 percentage unit higher unemployment rate for natives in 2015. This study’s results follow the pattern from earlier studies in the field, that since the 1990’s have shown similar effects when measuring different countries on different continents – sometimes the effect has been significant, sometimes not, and when significant the impact has been rather small, often clustering around zero.

本文設立一個採行浮動匯率制度、資本不完全移動且具有完全預知特性的的小型開放經濟體系，同時運用體制崩潰的方法，據以探導：當一個國家遭受未預料到商品供給面干擾，而對商品市場的供需產生變化，此時商品市場上因有超額需求的存在而使得物價持續上揚時，政府將會透過對名目貨幣供給數量的調整來抑制物價上揚的情況下，整體相關經濟變數的動態調整行為。由於民眾的預期具有完全預知的特性，因此當他們觀察經濟現象而事先掌握到貨幣當局於未來將採取的行動時，就會提前有所反應；也就是說，在貨幣當局尚未調整名目貨幣供給、體制尚未崩潰之前，經濟體系便會已先行調整。 研究的結果指出，政府所能忍受的物價上限水準不僅與體制崩潰的時機息息相關，同時也決定了體制是否崩潰。而政府所能忍受的物價上限水準的高低與資本移動性的相對大小則同時左右了體制崩潰過程中，匯率的動態調整型態。此外，在放寬充分就業水準的假設下，資本移動性的相對大小也影響了產出水準的調整路徑。