A Small Macroeconometric Model of the People's Republic of China

Publication | June 2006

This paper develops a fairly robust, immensely useful econometric model to capture the main macro dynamics and to forecast major macroeconomic indicators of the People's Republic of China's economy.

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.


  • Abstract
  • Introduction
  • Economy, Data, and Existing Models
  • Basic Structure of the PRC Model
  • Model Performance
  • Conclusion
  • Appendix
  • References

Additional Details

  • Economics
  • China, People's Republic of
  • 1655-5252 (Print)


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