Linear and Nonlinear Growth Determinants: The Case of Mongolia and its Connection to China

Amanda M.Y. Chu, Zhihui Lv, Niklas Wagner and Wing-Keung Wong

MPRA Paper from University Library of Munich, Germany

Abstract: We investigate growth determinants for Mongolia as a small emerging economy considering China as its large neighbor. Our causality analysis during January 1992 to August 2017 reveals significant linear and nonlinear relationships in growth explanation. China’s GDP and coal prices, together with some of their linear and nonlinear lagged components, predict Mongolia’s GDP, where a one percent increase in China’s GDP relates to an increase in Mongolia of 1.5 percent. Current exchange rates and the nonlinear components of lagged levels of consumer prices also explain growth. Our results underline the role of macroeconomic drivers of growth in emerging economies.

Keywords: gross domestic product (GDP); economic growth; energy prices; coal prices; consumer prices; foreign direct investment (FDI); exchange rates; cointegration; multivariate Granger causality; nonlinear Granger causality (search for similar items in EconPapers)
JEL-codes: C53 E52 F42 (search for similar items in EconPapers)
Date: 2020-03-20
New Economics Papers: this item is included in nep-cna, nep-fdg, nep-int, nep-mac and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Journal Article: Linear and nonlinear growth determinants: The case of Mongolia and its connection to China (2020)
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