Propagation of changes in demand through international trade: Case study China
Bernhard Kassner and
Wolf Heinrich Reuter ()
No 10/2016, Working Papers from German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung
China's economy, the second largest in the world, is undergoing a fundamental transition. Its transition from a strong focus on investment and exports towards a larger share of consumption could have important ramifications for China's trading partners. Using China as a case study, this paper deploys a sectoral input-output (IO) analysis to take into account higher-round spillovers from a reduction in import demand or a shift in the composition of the Chinese economy. This approach demonstrates strong indirect effects that exceed by far the initial shock from direct trade links, reflecting China's integration into a closely knit global value chain. The result suggests that the ongoing transition in China will have important effects on the global economy.
Keywords: Shock propagation; Trade channel; Input-Output; China (search for similar items in EconPapers)
JEL-codes: F14 C67 F47 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cna and nep-int
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Journal Article: Propagation of changes in demand through international trade: A case study of China (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:svrwwp:102016
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