News Center



Home News Center News

Introducing and Innovating Modern Economics

Oct 09-2021   



The inauguration of Cheng Ze Garden as the new campus of the NSD was followed by a forum on the mission and development of economics in China. Delighted to share the stage with the other five founding professors of CCER (the predecessor of the NSD), Prof. Justin Lin Yifu speaks on the introduction of Western economic theories and China’s economic transition.

 

CCER was set up with the goal of introducing Western economic theories to assist the reform and opening-up, modernization drive, and national rejuvenation of China, Prof. Lin recalls. Its 27-year history has witnessed the creation of an economic miracle in China. Notably, since the implementation of reform and opening up in 1978, China has conducted its economic transition in a gradual and dual-track way that maintains state interventions while allowing market entry. This went against the tenets of mainstream neo-liberal economics in the West at that time, stoking fears that the Chinese economy might be worse off compared with its planned-economy predecessor.

 

Yet China has achieved stable and rapid development ever since, so have countries that have taken a similar transitional path. Those that have adopted what was supposed to be the best transitional method (‘shock therapy’) have constantly fallen prey to stagnation and crisis. Prof. Lin says that scholars should contemplate why such a huge mismatch between cognition and actual development occurs.

 

Any theory must boil down to a simple cause-effect logical system and reveal the determinants of success or problems. Western economic theories either summarize the successful experience of developed countries or offer explanations and solutions to new issues that can’t be tackled by existing theories; therefore, they are built on assumed premises in line with the conditions of developed nations. Such assumed premises inevitably differ from the development stages and institutions of developing countries, so the application of such theories in these countries tends to go awry, says Prof. Lin.

 

Chinese economists can learn from Western economic gurus by summarizing successful experience of current era to form theories or examining today’s issues and putting forward new theories to guide practices. Only so, Prof. Lin says, will theories be of value to China’s national development and that of other developed countries.

 

Introducing and Innovating Modern Economics

Oct 09-2021   



The inauguration of Cheng Ze Garden as the new campus of the NSD was followed by a forum on the mission and development of economics in China. Delighted to share the stage with the other five founding professors of CCER (the predecessor of the NSD), Prof. Justin Lin Yifu speaks on the introduction of Western economic theories and China’s economic transition.

 

CCER was set up with the goal of introducing Western economic theories to assist the reform and opening-up, modernization drive, and national rejuvenation of China, Prof. Lin recalls. Its 27-year history has witnessed the creation of an economic miracle in China. Notably, since the implementation of reform and opening up in 1978, China has conducted its economic transition in a gradual and dual-track way that maintains state interventions while allowing market entry. This went against the tenets of mainstream neo-liberal economics in the West at that time, stoking fears that the Chinese economy might be worse off compared with its planned-economy predecessor.

 

Yet China has achieved stable and rapid development ever since, so have countries that have taken a similar transitional path. Those that have adopted what was supposed to be the best transitional method (‘shock therapy’) have constantly fallen prey to stagnation and crisis. Prof. Lin says that scholars should contemplate why such a huge mismatch between cognition and actual development occurs.

 

Any theory must boil down to a simple cause-effect logical system and reveal the determinants of success or problems. Western economic theories either summarize the successful experience of developed countries or offer explanations and solutions to new issues that can’t be tackled by existing theories; therefore, they are built on assumed premises in line with the conditions of developed nations. Such assumed premises inevitably differ from the development stages and institutions of developing countries, so the application of such theories in these countries tends to go awry, says Prof. Lin.

 

Chinese economists can learn from Western economic gurus by summarizing successful experience of current era to form theories or examining today’s issues and putting forward new theories to guide practices. Only so, Prof. Lin says, will theories be of value to China’s national development and that of other developed countries.