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Recent macroeconomic stability in China

Qing He () and Haiqiang Chen

China Economic Review, 2014, vol. 30, issue C, 505-519

Abstract: The volatility of Chinese GDP growth has been markedly lower since the mid-1990s. We utilize frequency domain and vector autoregression (VAR) methods to investigate the origin of the observed volatility reduction in the Chinese economy. Our estimation indicates that lower volatility of random shocks to the economy, or the good luck hypothesis, accounts for most of the decline in macroeconomic volatility. Although good policy and better business practices are also contributing factors, they play a marginal role in dampening China's economic fluctuations.

Keywords: Great moderation; Output volatility; China (search for similar items in EconPapers)
JEL-codes: C33 E31 E32 J00 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:30:y:2014:i:c:p:505-519

DOI: 10.1016/j.chieco.2013.07.005

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China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu

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