On the Effects of Internal and External Shocks on China’s Economy: Some Evidence from a Global VAR Model
Abstract
This study examines the transmission of internal and external economic disturbances to China’s key macroeconomic indicators, namely, GDP growth, inflation, and the exchange rate by adopting a Global Vector Autoregressive (GVAR) framework on a quarterly panel dataset of 33 economies spanning the period 1979Q2 to 2021Q4. Our results indicate various responses for different economic variables, but, overall, China’s economy remains resilient. In particular, external GDP growth shocks have significant spillover effects. Moreover, policy makers should consider both internal and external shocks and their spillovers in an open economy. Proactive measures are needed to maintain stable and sustainable growth during periods with negative global economic trends.
Fields of Study & Subjects
Monetary Policy and Economic Impact
Global Financial Crisis and Policies
Market Dynamics and Volatility
Publication details
- Journal / source
- Emerging Markets Finance and Trade
- Volume
- 62
- Issue
- 12
- Pages
- 4587–4608
- Publication date
- 13 January 2026
- Language
- EN