New Structural Economics: How It Comes into Being and Recent Progress — Celebrating the 30th Teaching Anniversary of Professor Justin Yifu Lin

Abstract

In the past 40 years of reform and opening up, the Chinese economy has achieved miraculous economic development with an annual GDP growth rate close to 10% on average. This remarkable achievement is unprecedented in the entire human history. At a meeting with leading Chinese experts in the fields of Philosophy and Social Sciences on May 17, 2016, General Party Secretary Xi Jinping pointed out that an era of tremendous social changes must be also an era of great development in Philosophy and Social Sciences. He expressed the hope that Philosophy and Social Sciences in China could flourish with important innovations in theory. The New Structural Economics（NSE hereafter）is such an attempt to develop an innovative and independent theory. Based on development experiences and lessons from China and other developing countries, NSE, guided by Marx’s historical materialism, adopts the modern research approach of Neoclassical Economics and highlights the crucial importance of economic structures”. NSE has gradually become the third wave of international trends in development economics. This paper aims to systematically review the history how NSE, as advocated by Justin Yifu Lin and his collaborators, has come into being, and also to provide an overview of the recent progress of NSE in both theory and practice. This paper is divided into six parts. The first part is the introduction. The second part is to divide the development of NSE into five stages: early germination, preliminary formation, systematic interpretation, deepening and expansion, and real-life application and implementation. The progress in each stage is carefully reviewed and assessed. In the third part, we discuss how NSE emerges as the third wave of development economics, how it differs from the previous two waves, and several academic debates on NSE. In the fourth part, we illustrate by specific examples how NSE provides different theoretical perspectives and analytical angles from the currently dominant theories. In the fifth part, we explain the core philosophy of NSE— Knowing and Achieving Be One, Achieving Verifies Knowing”, and show how this philosophy is hardwired in the new framework and new ideas in policy practice of NSE. The sixth part is a summary. Researchers of NSE should cherish a CHANGWU” mentality, adhering to the principle of openness and the concept of Knowing and Achieving Be One”. Researchers of NSE should never stop exploring new economic phenomena, new situations, and new problems and should keep improving, deepening and enriching both theory and practice of NSE.