Dingsheng Zhang
Central University of Finance and Economics
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Publication
Featured researches published by Dingsheng Zhang.
China Economic Review | 2000
Jeffrey D. Sachs; Xiaokai Yang; Dingsheng Zhang
Abstract This paper applies inframarginal analysis, which is a combination of marginal and total cost-benefit analysis, to a model with both constant returns and increasing returns in production. It demonstrates that as transaction conditions are improved, the general equilibrium discontinuously jumps from autarky to partial division of labor with a dual structure, then to the complete division of labor where the dual structure disappears. Two types of dual structure may occur in the transitional stage of economic development and globalization. One of them involves the division of labor in the developed economy and autarky in the less developed economy, generating increasing disparity of per capita real income between the two types of economies. The other involves a domestic dual structure in the less developed economy, where the population is divided between a commercialized sector that trades with a foreign country and a self-sufficient sector that is not involved in trade. All gains from trade go to the developed economy. This paper shows that deterioration of a countrys terms of trade and an increase of gains that this country receives from trade may concur, provided productivity progress from an expanded network of division of labor outpaces the deterioration of terms of trade. In the model with both endogenous and exogenous comparative advantages, a country may export a good with exogenous comparative disadvantage if endogenous comparative advantage dominates this exogenous comparative disadvantage. Implications of the findings for Chinas WTO membership and Chinas trade policy are explored.
The Singapore Economic Review | 2007
Wenli Cheng; Dingsheng Zhang
This paper develops two models to study the impact of trade in intermediate goods on wage inequality between skilled and unskilled labor in a developed country and a developing country. The first model assumes symmetric production technologies in the intermediate good. It predicts that trade in the intermediate good will increase wage inequality in the developed country, but decrease wage inequality in the developing country. The second model assumes asymmetric technologies in the intermediate good. It predicts that trade in the intermediate good can lead to an increase in wage inequality in both the developed country and the developing country.
Review of Development Economics | 2002
Jeffrey D. Sachs; Xiaokai Yang; Dingsheng Zhang
The paper introduces differences in production and transaction conditions between countries into a model of monopolistic competition. It applies inframarginal analysis to show that, as transaction conditions are improved, the general equilibrium may jump discontinuously across different patterns of trade and economic development. A country may export a good in which it has exogenous comparative disadvantage if its endogenous comparative advantage dominates this disadvantage. Countries will choose a trade and development pattern to utilize their net exogenous and endogenous comparative advantages in production as well as in transactions.
Pacific Economic Review | 2007
Wenli Cheng; Dingsheng Zhang
This paper develops a general equilibrium three-goods Ricardian model that extends Samuelsons example on the impact of productivity progress. Our model highlights Samuelsons insight that productivity progress can change the pattern of trade and in turn can have dramatic welfare implications. It also shows that while Samuelson is correct that productivity growth in one country can hurt another, the loss is not as permanent as his example appears to suggest. Continuing productivity growth in one country is likely to benefit all trading countries in the long run. Copyright 2007 The Authors Journal compilation 2007 Blackwell Publishing Ltd
Pacific Economic Review | 2006
Dingsheng Zhang; Heling Shi
This is a note about Cheng et al.s paper, in which we consider a dual structure of division of labour and trade that is missed in the model of Cheng et al. Though the inclusion of the dual structure will not change the main results in the paper by Cheng et al., it explores an interesting way to use a general equilibrium model to describe a dual structure with underemployment in a transitional period of economic development. Copyright 2006 Blackwell Publishing Ltd
Review of International Economics | 2012
Wenli Cheng; Dingsheng Zhang
Monetary shocks and how they are transmitted internationally are investigated in this paper. The paper shows that where a national currency is used as an international medium of exchange, the international money is non‐neutral. In particular, an increase in the supply of the international money leads to a transfer of real resources to the international money‐issuing country from its trading partner. It also induces an expansion of the nontradable sector in the international money‐issuing country, and an expansion of the tradable sector in its trading partner. The real impact of a monetary shock is greater under a fixed exchange rate system than under a flexible exchange rate system.
Pacific Economic Review | 2008
Wenli Cheng; Dingsheng Zhang
This paper presents a simple model to investigate the effectiveness of foreign aid. It shows that foreign aid is most effective if it is given to a market economy with relatively high transaction efficiency. If transaction efficiency in a market economy is low due to, for instance, bad institutions or policies, then foreign aid will either be largely dissipated as transaction costs or can even lead to retrogression of market activities. In either case, it will be more effective to give foreign aid to poor primitive economies with no developed markets. Copyright 2008 The Authors. Journal compilation 2008 Blackwell Publishing Asia Pty Ltd
Division of Labour & Transaction Costs: A Journal of the Society for Inframarginal Economics | 2011
Wenli Cheng; Dingsheng Zhang
This paper applies Coases (1937) theory of the firm to study public good provision. It compares three methods of public good provision: (1) collective provision, where users organize themselves to jointly finance the public good which is produced by a specialized firm; (2) market provision without outsourcing, where a firm produces the public good and a private good, and sells them as a bundle; (3) market provision with outsourcing, where a firm produces a private good, outsources the public good, and sell them as a bundle. All three methods of public goods provision deal with the problem of non-excludability, but each is associated with different transaction costs, organization costs, and specialization economies. The best method is the one which achieves the optimum tradeoffs among transaction costs, organization costs, and specialization economies.
Economic Modelling | 2013
Dingsheng Zhang; Wenli Cheng; Yew-Kwang Ng
Journal of Economics | 2007
Yew-Kwang Ng; Dingsheng Zhang