Comparing China's GDP Statistics with Coincident Indicators

Mehrotra, Aaron N.; Paakkonen, Jenni

doi:10.2139/ssrn.1767811

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Comparing China's GDP Statistics with Coincident Indicators

BOFIT Discussion Paper No. 1/2011

33 Pages Posted: 23 Feb 2011

See all articles by Aaron N. Mehrotra

Aaron N. Mehrotra

Bank for International Settlements (BIS)

Jenni Paakkonen

Government of the Republic of Finland - VATT Institute for Economic Research; Bank of Finland - Institute for Economies in Transition (BOFIT)

Date Written: February 18, 2011

Abstract

We use factor analysis to summarize information from various macroeconomic indicators, effectively producing coincident indicators for the Chinese economy. We compare the dynamics of the estimated factors with GDP, and compare our factors with other published indicators for the Chinese economy. The indicator data match the GDP dynamics well and discrepancies are very short. The periods of discrepancies seem to correspond to shocks affecting the growth process as neither autoregressive models for GDP itself nor various coincident indicators are able to forecast them satisfactorily.

Keywords: factor models, principal component, GDP, China

JEL Classification: C38, O4, P2

Suggested Citation: Suggested Citation

Mehrotra, Aaron N. and Paakkonen, Jenni, Comparing China's GDP Statistics with Coincident Indicators (February 18, 2011). BOFIT Discussion Paper No. 1/2011, Available at SSRN: https://ssrn.com/abstract=1767811 or http://dx.doi.org/10.2139/ssrn.1767811