【IMIWorkingPaperNo.1901[EN]】MultivariateFilterEstimationandARDLModelAnalysisofChina’sPotentialOutput

【Abstract】 In this paper, we apply a new multivariate filter approach developed by Borio et al. (2014) to estimate China’s potential output. Furthermore, we build an ARDL model to analyze the influence on potential growth caused by important factors that contribute to estimation and China’s development. Our results show that the current economic slowdown is not a cyclical phenomenon and China’s potential growth has declined since 2010. We also show that fix asset investment and trade, which have a long run relationship with potential output, exert negative long-run effect on potential growth justifying the implementation of China’s recent supply-side reforms.

【Keywords】 Potential output, Economic growth, Multivariate filter, ARDL

【Authors】

Dong Qi, Hanqing Advanced Institute of Economics and Finance, Renmin University of China.

Liu XiangBo, Hanqing Advanced Institute of Economics and Finance, Renmin University of China; School of Labor and Human Resources, Renmin University of China; Research fellow of IMI.