Adding China to the Global Projection Model

Patrick Blagrave, Peter Elliott, Roberto Garcia-Saltos, Doug Hostland, Douglas Laxton and Fan Zhang

No 2013/256, IMF Working Papers from International Monetary Fund

Abstract: We extend the Global Projection Model (GPM) to include a separate block for China. China plays an important role in shaping global economic outcomes, given its sheer size and trade integration with other key economies, its demand for commodities, and its policies. Also, the Chinese economy has several unique features which differentiate it from the rest of emerging Asia. These features (the use of multiple monetary-policy instruments and a managed-floating exchange-rate policy) mean that a separate treatment of China allows for a better consideration of China, as well as how the rest of emerging Asia behaves.

Keywords: WP; exchange rate; China; Global Macroeconomic Model; spillovers; response to the output gap; inflation dynamics; inflation process; disturbance term; reaction function; China block; demand shock; reserve-requirement ratio; process in the China block; core inflation; exchange-rate response; inflation equation; Inflation; Output gap; Exchange rates; Central bank policy rate; Oil prices; Global (search for similar items in EconPapers)
Pages: 33
Date: 2013-12-19
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Citations: View citations in EconPapers (14)

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