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China’s slowdown and global financial market volatility: Is world growth losing out?

Paul Cashin (), Kamiar Mohaddes () and Mehdi Raissi

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: China's GDP growth slowdown and a surge in global financial market volatility could both adversely affect an already weak global economic recovery. To quantify the global macroeconomic consequences of these shocks, we employ a GVAR model estimated for 26 countries/regions over the period 1981Q1 to 2013Q1. Our results indicate that (i) a one percent permanent negative GDP shock in China (equivalent to a one-off one percent growth shock) could have significant global macroeconomic repercussions, with world growth reducing by 0.23 percentage points in the short-run; and (ii) a surge in global financial market volatility could translate into a fall in world economic growth of around 0.29 percentage points, but it could also have negative short-run impacts on global equity markets, oil prices and long-term interest rates.

Keywords: China’s slowdown; global financial market volatility; international business cycle; and Global VAR (search for similar items in EconPapers)
JEL-codes: C32 E32 F44 O53 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cna, nep-mac and nep-tra
Date: 2016-09
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https://cama.crawford.anu.edu.au/sites/default/fil ... ohaddes_raissi_0.pdf (application/pdf)

Related works:
Journal Article: China's slowdown and global financial market volatility: Is world growth losing out? (2017) Downloads
Working Paper: China’s Slowdown and Global Financial Market Volatility: Is World Growth Losing Out? (2016) Downloads
Working Paper: China’s slowdown and global financial market volatility: is world growth losing out? (2016) Downloads
Working Paper: China's Slowdown and Global Financial Market Volatility; Is World Growth Losing Out? (2016) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2016-57

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