Adding China to the Global Projection Model

34 Pages Posted: 20 Jan 2014

See all articles by Patrick Blagrave

Patrick Blagrave

International Monetary Fund (IMF)

Peter Elliott

International Monetary Fund (IMF)

Roberto Garcia-Saltos

International Monetary Fund (IMF)

Douglas Hostland

World Bank - Africa

Douglas Laxton

International Monetary Fund (IMF) - Research Department

Fan Zhang

International Monetary Fund (IMF)

Date Written: December 2013

Abstract

We extend the Global Projection Model (GPM) to include a separate block for China. China plays an important role in shaping global economic outcomes, given its sheer size and trade integration with other key economies, its demand for commodities, and its policies. Also, the Chinese economy has several unique features which differentiate it from the rest of emerging Asia. These features (the use of multiple monetary-policy instruments and a managed-floating exchange-rate policy) mean that a separate treatment of China allows for a better consideration of China, as well as how the rest of emerging Asia behaves.

Keywords: Forecasting models, China, Monetary policy, Inflation, Exchange rate regimes, Commodity prices, Global Macroeconomic Model, spillovers, inflation target, real interest rate, inflationary pressures, inflation dynamics, reserve requirements, nominal interest rate, monetary fund, inflation process, inflation equation, money base, increase in interest rates, monetary policy reaction function, transmission of monetary policy, monetary authority, inflationary impact, inflation rates, price elasticity, monetary policy decisions, real interest rates, inflation targeting, real wages, price level, foreign exchange, increase in inflation, nominal interest rates

JEL Classification: C50, E10, E60, F01, F10

Suggested Citation

Blagrave, Patrick and Elliott, Peter and Garcia-Saltos, Roberto and Hostland, Douglas and Laxton, Douglas and Zhang, Fan, Adding China to the Global Projection Model (December 2013). IMF Working Paper No. 13/256, Available at SSRN: https://ssrn.com/abstract=2381854

Patrick Blagrave (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Peter Elliott

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Roberto Garcia-Saltos

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Douglas Hostland

World Bank - Africa

1818 H Street
Washington, DC 20433
United States

Douglas Laxton

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Fan Zhang

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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