Global Spillovers of a China Hard Landing

Shaghil Ahmed, Ricardo Correa, Daniel Dias, Nils Gornemann, Jasper Hoek, Anil K. Jain, Edith Liu and Anna Wong
Additional contact information
Anil K. Jain: https://www.federalreserve.gov/econres/anil-k-jain.htm

No 1260, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: China?s economy has become larger and more interconnected with the rest of the world, thus raising the possibility that acute financial stress in China may lead to global financial instability. This paper analyzes the potential spillovers of such an event to the rest of the world with three methodologies: a VAR, an event study, and a DSGE model. We find the sentiment channel to be the primary spillover channel to the United States, affecting global risk aversion and asset prices such as equity prices and the dollar, in addition to modest real effects through the trade channel. In comparison, the combined financial and real effects to other advanced and emerging market economies, especially net commodity exporters, would be more consequential due to their larger direct exposure to China and more limited scope of monetary policy to respond to shocks.

Keywords: China; Financial crisis; Spillovers; Financial system (search for similar items in EconPapers)
JEL-codes: E60 F30 G28 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2019-10-18
New Economics Papers: this item is included in nep-cna, nep-fdg, nep-mac and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://www.federalreserve.gov/econres/ifdp/files/ifdp1260.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgif:1260

DOI: 10.17016/IFDP.2019.1260

Access Statistics for this paper

More papers in International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.) Contact information at EDIRC.
Bibliographic data for series maintained by Ryan Wolfslayer ; Keisha Fournillier ().