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Forecasting China's Economic Growth and Inflation

Listed author(s):
  • Patrick Higgins
  • Tao Zha
  • Karen Zhong

Although macroeconomic forecasting forms an integral part of the policymaking process, there has been a serious lack of rigorous and systematic research in the evaluation of out-of-sample model-based forecasts of China's real GDP growth and CPI inflation. This paper fills this research gap by providing a replicable forecasting model that beats a host of other competing models when measured by root mean square errors, especially over long-run forecast horizons. The model is shown to be capable of predicting turning points and to be usable for policy analysis under different scenarios. It predicts that China's future GDP growth will be of L-shape rather than U-shape.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 22402.

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Date of creation: Jul 2016
Publication status: published as Patrick Higgins & Tao Zha & Wenna Zhong, 2016. "Forecasting China's economic growth and inflation," China Economic Review, .
Handle: RePEc:nbr:nberwo:22402
Note: EFG ME
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