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The gains from catch-up for China and the USA: An empirical framework

Dungey, M ORCID: 0000-0003-0074-2314 and Osborn, DR 2020 , 'The gains from catch-up for China and the USA: An empirical framework' , Economic Record , pp. 1-16 , doi: 10.1111/1475-4932.12522.

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Abstract

As China becomes more closely entwined with the US, positive shocks inthe US translate into positive outcomes for China, but the extent of gain forthe US during the convergence process is less clear. We develop an empiricalframework of two interacting open economies in which Chinese GDP percapita moves towards convergence and cointegration with the US, resultingin a time-varying structural VAR model. As a result, the impulse responsesof the two countries to shocks are sensitive to the timing of the shock. Thechanging e¤ects of US shocks are evident in the analysis, which shows thatover the convergence process both the US and China unambiguously bene…tfrom the catch-up process.

Item Type: Article
Authors/Creators:Dungey, M and Osborn, DR
Keywords: China, SVAR, convergence, catch-up
Journal or Publication Title: Economic Record
Publisher: Economic Soc Of Australia Brown Prior Anderson Pty Ltd
ISSN: 0013-0249
DOI / ID Number: 10.1111/1475-4932.12522
Copyright Information:

© 2020 Economic Society of Australia

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