China's slowdown and global financial market volatility: Is world growth losing out?
Emerging Markets Review
MetadataShow full item record
Cashin, P., Mohaddes, K., & Raissi, M. (2017). China's slowdown and global financial market volatility: Is world growth losing out?. Emerging Markets Review, 31 164-175. https://doi.org/10.1016/j.ememar.2017.05.001
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.
China's slowdown, global financial market volatility, international business cycle, Global VAR
External DOI: https://doi.org/10.1016/j.ememar.2017.05.001
This record's URL: https://www.repository.cam.ac.uk/handle/1810/265854