The ever-evolving trade pattern

A global VAR approach

Bibliographic Data

ID21542500
AuthorsRazieh Zahedi (0000-0002-8230-1020, World Bank Group, corresponding author), Asghar Shahmoradi (International Monetary Fund), Ali Taiebnia (0000-0003-0171-5932, University of Tehran)
Year2022
Volume63
Issue3
Pages1193-1218
Publication date2022-09-01
Open AccessYes
TypeARTICLE
VenueEmpirical Economics (JOURNAL)
Journal identifiersISSN: 0377-7332 • E-ISSN: 1435-8921
PublisherSpringer Science and Business Media LLC (PUBLISHER)
DOI10.1007/s00181-021-02182-5
PMID35035061
OpenAlexW4205403943
LanguageEN
References cited54

This paper focuses on the spillover dynamics of shocks originating in China during the last two decades. More specifically, the paper compares the effects of a shock to China's GDP and exchange rate using early 2000s trade patterns with those of two decades later. We use a global vector autoregressive (GVAR) model as it allows to consider trade interactions as well as financial linkages through interest rates, stock prices, and exchange rates. Our results indicate that the shock spillovers from China have become more pronounced over the past two decades. While the world has become more exposed to China's economy, it has become more susceptible to Chinese economic shocks. This paper contributes to the literature by evaluating the dynamics of China's spillover effects and highlights the structural changes in trade between major global trade players.

Econometrics · Economics · International trade · Global Financial Crisis and Policies · Global trade and economics · Monetary Policy and Economic Impact

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