Taking the temperature : forecasting GDP growth for mainland in China

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Title: Taking the temperature : forecasting GDP growth for mainland in China
Author: Curran, Declan ; Funke, Michael
Organization: Bank of Finland
Department / Unit: Institute for Economies in Transition (BOFIT)
Series: BOFIT Discussion Papers
Series number: 6/2006
Year of publication: 2006
Publication date: 30.5.2006
Pages: 40 s.
Keywords: bkt; Kiina; ennusteet; indikaattorit; suhdanteet; talouskasvu; Bofit-kokoelma;
JEL: C32; C52; E32; E37
Abstract: We present a new composite leading indicator of economic activity in mainland China, estimated using a dynamic factor model.Our leading indicator is constructed from three series: exports, a real estate climate index, and the Shanghai Stock Exchange index.These series are found to share a common, unobservable element from which our indicator can be identified.This indicator is then incorporated into out-of-sample one-step-ahead forecasts of Chinese GDP growth.Recursive out-of-sample accuracy tests indicate that the smallscale factor model approach leads to a successful representation of the sample data and provides an appropriate tool for forecasting Chinese business conditions. Keywords: Forecasting, China, Leading Indicator, Factor Model, Growth Cycles JEL-Classification: C32, C52, E32, E37
Rights: https://helda.helsinki.fi/bof/copyright

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