Abstract:
We study the global impact of the Chinese economy based on a novel indirect approach where the spillover effect is quantified from a forecast error model under relatively favorable identifying con-ditions. Findings from the real-time World Economic Outlook data over the period 2004-2015 indicate that an increase in economic growth in China had a negative impact on most other economies one to two years ahead. The estimations furthermore uncover evidence at the global level that spill-over propagated by influencing prices, including global commodity prices, which tend to increase in reaction to accelerating economic growth in China.