What Happens in China Does Not Stay in China
Eggers Hall, 341
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Moynihan Institute of Global Affairs and the Trade, Development and Political Economy program is proud to host Eva Van Leemput, Chief, Emerging Market Economies Section, Board of Governors of the Federal Reserve System.
Spillovers from China to global financial markets have been found to be small owing to China’s limited integration in the global financial system. In this paper, however, we provide evidence that China constitutes an important driver of the global financial cycle. We argue that because of China’s importance for global consumption, stronger Chinese growth raises global growth prospects, inducing an increase in global risk sentiment and an expansion in global asset prices and global credit. Two contributions are key to this finding:
(1) We construct a measure of China’s credit impulse to
identify Chinese policy-induced demand shocks. Our approach takes advantage of
the fact that a primary tool of China’s stabilization policy—encompassing
monetary, fiscal, and regulatory policies—is controlling the amount of credit
in the economy. Without China’s credit impulse, it is difficult to discern
global financial spillovers;
(2) We estimate an alternative measure of Chinese
GDP growth that captures its business cycle given data concerns about the
smoothness of official GDP data. Without China’s alternative GDP measure, it is
difficult to attribute any global cycle movements to economic developments in
China.
Category
Social Science and Public Policy
Type
Talks
Region
Campus
Open to
Public
Organizer
MAX-Moynihan Institute of Global Affairs
Accessibility
Contact Georgios Tsaoussis Carter to request accommodations
We’re Turning 100!
To mark our centennial in the fall of 2024, the Maxwell School will hold special events and engagement opportunities to celebrate the many ways—across disciplines and borders—our community ever strives to, as the Oath says, “transmit this city not only not less, but greater, better and more beautiful than it was transmitted to us.”
Throughout the year leading up to the centennial, engagement opportunities will be held for our diverse, highly accomplished community that now boasts more than 38,500 alumni across the globe.