Economics at Xiamen University


Recent Macroeconomic Stability in China
Qing He, Haiqiang Chen
China Economic Review 30 (2014) 505–519
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The volatility of Chinese GDP growth has been markedly lower since the mid-1990s. We utilize frequency domain and vector autoregression (VAR) methods to investigate the origin of the observed volatility reduction in the Chinese economy. Our estimation indicates that lower volatility of randomshocks to the economy, or the good luck hypothesis, accounts for most of the decline in macroeconomic volatility. Although good policy and better business practices are also contributing factors, they play a marginal role in dampening China's economic fluctuations.
JEL-Codes: C33 E31 E32 J00
Keywords: Great moderation Output volatility China

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