Re-examining international spillovers: An Asian perspective

Georgios Magkonis, Simon Rudkin and Shuonan Zhang

International Review of Economics & Finance, 2024, vol. 96, issue PB

Abstract: This study investigates the transmission and the business cycle implications of Chinese export shocks to other Asian economies. Based on a panel vector autoregression (PVAR) model, we provide evidence that a positive export shock originating from China simultaneously stimulates aggregate demands for both China and other Asian economies. The PVAR model takes into account three main sources of potential interactions among ten Asian economies. Simulations from a two-country DSGE model featuring endogenous trade links suggest that positive trade spillover is essential to explain the macroeconomic comovement pattern. Our findings further indicate the importance of the Chinese economy to business cycle synchronization.

Keywords: Export shock; Panel VAR; DSGE model; Spillover effect (search for similar items in EconPapers)
JEL-codes: C51 E37 F41 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:96:y:2024:i:pb:s1059056024005732

DOI: 10.1016/j.iref.2024.103581

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