China's slowdown and global financial market volatility: Is world growth losing out?

Paul Cashin (), Kamiar Mohaddes and Mehdi Raissi

Emerging Markets Review, 2017, vol. 31, issue C, 164-175

Abstract: China's GDP growth slowdown and a surge in global financial market volatility could both adversely affect an already weak global economic recovery. To quantify the global macroeconomic consequences of these shocks, we employ a GVAR model estimated for 26 countries/regions over the period 1981Q1 to 2013Q1. Our results indicate that (i) a one percent permanent negative GDP shock in China (equivalent to a one-off one percent growth shock) could have significant global macroeconomic repercussions, with world growth reducing by 0.23 percentage points in the short-run; and (ii) a surge in global financial market volatility could translate into a fall in world economic growth of around 0.29 percentage points, but it could also have negative short-run impacts on global equity markets, oil prices and long-term interest rates.

Keywords: China's slowdown; Global financial market volatility; International business cycle; Global VAR (search for similar items in EconPapers)
JEL-codes: C32 E32 F44 O53 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

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Related works:
Working Paper: China’s Slowdown and Global Financial Market Volatility: Is World Growth Losing Out? (2016)
Working Paper: China’s slowdown and global financial market volatility: Is world growth losing out? (2016)
Working Paper: China’s slowdown and global financial market volatility: is world growth losing out? (2016)
Working Paper: China's Slowdown and Global Financial Market Volatility: Is World Growth Losing Out? (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:31:y:2017:i:c:p:164-175

DOI: 10.1016/j.ememar.2017.05.001

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