The spillover effects of Chinese economy on Southeast Asia and Oceania

Anna Sznajderska and Mariusz Kapuściński

No 315, NBP Working Papers from Narodowy Bank Polski

Abstract: The slowdown of economy and widening of domestic imbalances in China bothers economists and politicians across the globe. The effects of a Chinese transition to a new growth model for other countries are uncertain. We quantify them by estimating the influence of a negative output shock in China on a number of different economies. We concentrate on China’s neighbouring countries. We compare the results from the Global VAR model and from the Bayesian VAR models that include Chinese variables as endogenous. Also we search for determinants of Chinese spillovers for the global economy. To this end, having a large number of factors potentially explaining differences in responses compared to the number of observations, we use Bayesian model averaging. We find that spillovers are stronger to economies with less flexible exchange rates, a higher share of manufacturing in gross value added and to economies which are larger.

Keywords: global VAR; Bayesian VAR; China’s slowdown; spillovers; structural characteristics (search for similar items in EconPapers)
JEL-codes: C32 E32 F10 O53 (search for similar items in EconPapers)
Pages: 36
Date: 2019
New Economics Papers: this item is included in nep-mac and nep-sea
Note: This work was supported by the National Science Center under Grant No. 2016/21/D/ HS4/02798. The authors are grateful for helpful comments of conference participants at EcoMod 2019 in Ponta Delgada.
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Persistent link: https://EconPapers.repec.org/RePEc:nbp:nbpmis:315

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