A Small Macroeconometric Model of the People's Republic of China
This paper describes a quarterly macroeconometric model of the economy of People's Republic of China. 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 in order to ensure the best possible blend of a priori long-run theories with a posteriori identified short-run factors, as well as country-specific features. 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.
- Economy, Data, and Existing Models
- Basic Structure of the PRC Model
- Model Performance