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

Emerging Markets Review, 2020, vol. 43, issue C

Abstract: We investigate growth determinants for Mongolia as a small emerging economy with respect to China as its large neighbor. Our causality analysis during 1992 to 2017 reveals significant linear as well as 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 1 % increase in China's GDP relates to a 1.5% increase in that of Mongolia. Current exchange rates and the nonlinear components of lagged consumer prices also explain growth. Our results underline the role of macroeconomic drivers of growth in emerging economies.

Keywords: Economic growth; Energy prices; Consumer prices; Foreign direct investment (FDI); Exchange rates; Multivariate Granger causality (search for similar items in EconPapers)
JEL-codes: C53 E52 F42 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Working Paper: Linear and Nonlinear Growth Determinants: The Case of Mongolia and its Connection to China (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:43:y:2020:i:c:s156601411830428x

DOI: 10.1016/j.ememar.2020.100693

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