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No. 553: A Macroeconometric Model of the Chinese Economy

Duo Qin , Queen Mary, University of London
Marie Anne Cagas , Asian Development Bank (ADB)
Geoffrey Ducanes , Asian Development Bank (ADB)
Xinhua He , Institute of World Economics & Politics (IWEP), Chinese Academy of Social Sciences (CASS)
Rui Liu , Institute of World Economics & Politics (IWEP), Chinese Academy of Social Sciences (CASS)
Shiguo Liu , Institute of World Economics & Politics (IWEP), Chinese Academy of Social Sciences (CASS)
Nedelyn Magtibay-Ramos , Asian Development Bank (ADB)
Pilipinas Quising , Asian Development Bank (ADB)

March 1, 2006

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Abstract

This paper describes a quarterly macroeconometric model of the Chinese economy. The model comprises household consumption, investment, government, trade, production, prices, money, and employment blocks. The equilibrium-correction form is used for all the behavioral equations and the general→simple dynamic specification approach is adopted. Great efforts have been made to achieve the best possible blend of standard long-run theories, country-specific institutional features and short-run dynamics in data. The tracking performance of the model is evaluated. Forecasting and empirical investigation of a number of topical macroeconomic issues utilizing model simulations have shown the model to be immensely useful.

J.E.L classification codes: C51, E17

Keywords:Macroeconometric model, Chinese economy, Forecasts, Simulations

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