Win-win? Assessing the global impact of the Chinese economy

We study the global impact of the Chinese economy based on a novel indirect approach where the spillover effect is quantified from a forecast error model under relatively favorable identifying conditions. Findings from the real-time World Economic Outlook data over the period 2004 ̶ 2015 indicate th...

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Bibliographic Details
Published in:Asia and the Global Economy 2021-01, Vol.1 (1), p.100006, Article 100006
Main Authors: Herrala, Risto, Orlandi, Fabrice
Format: Article
Language:English
Subjects:
Chinese economy
F15
F440
Global spillover
Real time data
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Summary:We study the global impact of the Chinese economy based on a novel indirect approach where the spillover effect is quantified from a forecast error model under relatively favorable identifying conditions. Findings from the real-time World Economic Outlook data over the period 2004 ̶ 2015 indicate that an increase in economic growth in China had a negative impact on most other economies one to two years ahead. The estimations furthermore uncover evidence at the global level that spillover propagated by influencing prices, including global commodity prices, which tend to increase in reaction to accelerating economic growth in China.
ISSN:2667-1115
2667-1115
DOI:10.1016/j.aglobe.2021.100006