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China's macroeconomic volatility -- How important is the business cycle?

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  • Laurenceson, James
  • Rodgers, Danielle

Abstract

The existing literature that discusses China's macroeconomic volatility during the reform period does so with overwhelming reference to the business cycle. However, the business cycle is only a subset of macroeconomic volatility that occurs within a particular frequency band. In this paper we decompose various macroeconomic series by frequency and find that much volatility occurs at lower than business cycle frequencies. This suggests that it is necessary to look beyond the construct of the business cycle in order to understand the nature of China's macroeconomic volatility, and beyond the usual demand side explanations in the discussion of causes.

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  • Laurenceson, James & Rodgers, Danielle, 2010. "China's macroeconomic volatility -- How important is the business cycle?," China Economic Review, Elsevier, vol. 21(2), pages 324-333, June.
    • Handle: RePEc:eee:chieco:v:21:y:2010:i:2:p:324-333
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    Cited by:

    1. Chen, Yen-Hsiao & Quan, Lianfeng & Liu, Yang, 2013. "An empirical investigation on the temporal properties of China's GDP," China Economic Review, Elsevier, vol. 27(C), pages 69-81.
    2. Guo, Shen & Liu, Lezheng & Zhao, Yan, 2015. "The business cycle implications of land financing in China," Economic Modelling, Elsevier, vol. 46(C), pages 225-237.
    3. He, Qing & Chen, Haiqiang, 2014. "Recent macroeconomic stability in China," China Economic Review, Elsevier, vol. 30(C), pages 505-519.
    4. Badarau-Semenescu, Cristina & Ndiaye, Cheikh Tidiane, 2010. "Politique économique et transmission des chocs dans la zone euro," L'Actualité Economique, Société Canadienne de Science Economique, vol. 86(1), pages 35-77, mars.
    5. Yueqing Jia, 2011. "A New Look at China’s Output Fluctuations: Quarterly GDP Estimation with an Unobserved Components Approach," Working Papers 2011-006, The George Washington University, Department of Economics, Research Program on Forecasting.

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    Keywords

    Business fluctuations Cycles;

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