A DSGE Model of China

Li Dai, A. Patrick Minford and Peng Zhou

No E2014/4, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: We use available methods for testing macro models to evaluate a model of China over the period from Deng Xiaoping s reforms up until the crisis period. Bayesian ranking methods are heavily influenced by controversial priors on the degree of price/wage rigidity. When the overall models are tested by Likelihood or Indirect Inference methods, the New Keynesian model is rejected in favour of one with a fair-sized competitive product market sector. This model behaves quite a lot more flexibly than the New Keynesian.

Keywords: China; DSGE; Bayesian Inference; Indirect Inference (search for similar items in EconPapers)
JEL-codes: C11 C15 C18 E27 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2014-05
New Economics Papers: this item is included in nep-cna, nep-dge, nep-mac and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: A DSGE model of China (2015)
Working Paper: A DSGE Model of China (2014)
Working Paper: A DSGE Model of China (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:cdf:wpaper:2014/4

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