IDEAS home Printed from https://ideas.repec.org/a/eee/chieco/v27y2013icp69-81.html
   My bibliography  Save this article

An empirical investigation on the temporal properties of China's GDP

Author

Listed:
  • Chen, Yen-Hsiao
  • Quan, Lianfeng
  • Liu, Yang

Abstract

This paper employs a structural time series model designed with three components of stochastic seasonality, trigonometric expression of cyclicality and local linear trend to investigate the evolutionary process of China's GDP. In particular, the model is able to detect the stop–go feature of China's economic growth, i.e., growth cycle, as well as business cycle. The empirical result suggests that most variation in China's macroeconomic performance came from business cycle. The investigation of the three components along with historical events suggests that the Chinese economy had been largely influenced by political activities up to the early 1990s. In the mid-1990s China entered a period of stable and highly growing economy, thanks to the economic reform and the successful implementation of macroeconomic policies. However, since the mid-2000s China has become more sensitive to the turbulences in international markets. In the foreseeable future, the challenge facing China is a more volatile economy with possible slowdown in the economic growth, although the growth rate would still be high compared to developed economies.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:chieco:v:27:y:2013:i:c:p:69-81
    DOI: 10.1016/j.chieco.2013.07.007
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1043951X13000497
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. J. Durbin & S. J. Koopman, 2000. "Time series analysis of non-Gaussian observations based on state space models from both classical and Bayesian perspectives," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 62(1), pages 3-56.
    2. Harry X. Wu, 2007. "The Chinese GDP Growth Rate Puzzle: How Fast Has the Chinese Economy Grown?," Asian Economic Papers, MIT Press, vol. 6(1), pages 1-23, Winter.
    3. Yu, Qiao, 1997. "Economic Fluctuation, Macro Control, and Monetary Policy in the Transitional Chinese Economy," Journal of Comparative Economics, Elsevier, vol. 25(2), pages 180-195, October.
    4. Harvey, Andrew, 2006. "Forecasting with Unobserved Components Time Series Models," Handbook of Economic Forecasting, Elsevier.
    5. Brandt, Loren & Zhu, Xiaodong, 2001. "Soft budget constraint and inflation cycles: a positive model of the macro-dynamics in China during transition," Journal of Development Economics, Elsevier, vol. 64(2), pages 437-457, April.
    6. Tingguo Zheng & Yujuan Teng & Tao Song, 2010. "Business Cycle Asymmetry in China: Evidence from Friedman's Plucking Model," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 18(s1), pages 103-120.
    7. He, Qing & Tai-Leung Chong, Terence & Shi, Kang, 2009. "What accounts for Chinese Business Cycle?," China Economic Review, Elsevier, vol. 20(4), pages 650-661, December.
    8. 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.
    9. Gong, Gang & Lin, Justin Yifu, 2008. "Deflationary expansion: An overshooting perspective to the recent business cycle in China," China Economic Review, Elsevier, vol. 19(1), pages 1-17, March.
    10. James Morley & Jeremy Piger, 2012. "The Asymmetric Business Cycle," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 208-221, February.
    11. Maddison, Angus, 2007. "Contours of the World Economy 1-2030 AD: Essays in Macro-Economic History," OUP Catalogue, Oxford University Press, number 9780199227204.
    12. Barry Bosworth & Susan M. Collins, 2008. "Accounting for Growth: Comparing China and India," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 45-66, Winter.
    13. Rawski, Thomas G., 2001. "What is happening to China's GDP statistics?," China Economic Review, Elsevier, vol. 12(4), pages 347-354.
    14. World Bank, 2005. "World Development Indicators 2005," World Bank Publications, The World Bank, number 12426, November.
    15. Keidel, Albert, 2001. "China's GDP expenditure accounts," China Economic Review, Elsevier, vol. 12(4), pages 355-367.
    16. Andrews, Rick L, 1994. "Forecasting Performance of Structural Time Series Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 12(1), pages 129-133, January.
    17. Shahid Yusuf, 1994. "China's Macroeconomic Performance and Management during Transition," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 71-92, Spring.
    18. Xinhua He, 2010. "Noteworthy Discrepancies in China's GDP Accounting," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 18(s1), pages 88-102.
    19. Xu, Xinpeng & Voon, J. P., 2003. "Regional integration in China: a statistical model," Economics Letters, Elsevier, vol. 79(1), pages 35-42, April.
    20. Xu, Xinpeng, 2002. "Have the Chinese provinces become integrated under reform?," China Economic Review, Elsevier, vol. 13(2-3), pages 116-133.
    21. Andrew Harvey & Siem Jan Koopman, 2000. "Signal extraction and the formulation of unobserved components models," Econometrics Journal, Royal Economic Society, vol. 3(1), pages 84-107.
    22. Loren Brandt & Xiaodong Zhu, 2000. "Redistribution in a Decentralized Economy: Growth and Inflation in China under Reform," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 422-451, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bosupeng, Mpho, 2015. "Payoffs of Education Expenditure In Botswana: Long Run Economic Growth Implications," MPRA Paper 77915, University Library of Munich, Germany, revised 2015.

    More about this item

    Keywords

    Unobserved components; State space model; Output gap; Structural break; Five-Year Plan;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:27:y:2013:i:c:p:69-81. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/chieco .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.