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

Risto Herrala and Fabrice Orlandi

No 4/2020, BOFIT Discussion Papers from Bank of Finland Institute for Emerging Economies (BOFIT)

Abstract: 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 con-ditions. 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 spill-over propagated by influencing prices, including global commodity prices, which tend to increase in reaction to accelerating economic growth in China.

Keywords: Chinese economy; global spillover; real time data (search for similar items in EconPapers)
JEL-codes: C2 F15 F44 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bofitp:bdp2020_004

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