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The spillover effects of Chinese economy on Southeast Asia and Oceania

Author

Listed:
  • Anna Sznajderska

    (Warsaw School of Economics and Narodowy Bank Polski)

  • Mariusz Kapuściński

    (Warsaw School of Economics and Narodowy Bank Polski)

Abstract

The slowdown of economy and widening of domestic imbalances in China bothers economists and politicians across the globe. The effects of a Chinese transition to a new growth model for other countries are uncertain. We quantify them by estimating the influence of a negative output shock in China on a number of different economies. We concentrate on China’s neighbouring countries. We compare the results from the Global VAR model and from the Bayesian VAR models that include Chinese variables as endogenous. Also we search for determinants of Chinese spillovers for the global economy. To this end, having a large number of factors potentially explaining differences in responses compared to the number of observations, we use Bayesian model averaging. We find that spillovers are stronger to economies with less flexible exchange rates, a higher share of manufacturing in gross value added and to economies which are larger.

Suggested Citation

  • Anna Sznajderska & Mariusz Kapuściński, 2019. "The spillover effects of Chinese economy on Southeast Asia and Oceania," NBP Working Papers 315, Narodowy Bank Polski.
    • Handle: RePEc:nbp:nbpmis:315
    Note: This work was supported by the National Science Center under Grant No. 2016/21/D/ HS4/02798. The authors are grateful for helpful comments of conference participants at EcoMod 2019 in Ponta Delgada.
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    More about this item

    Keywords

    global VAR; Bayesian VAR; China’s slowdown; spillovers; structural characteristics;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F10 - International Economics - - Trade - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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