How Could a Shock to Growth in China Affect Growth in the United Kingdom?
8 Pages Posted: 8 Apr 2016
Date Written: March 18, 2016
This article assesses how a shock to Chinese growth could affect the UK economy using an empirical model of the world economy that exploits the historical comovement between international business cycles. We find that a 1% slowing in China is likely to reduce UK GDP by around 0.1%. This impact arises mainly from the increasingly important role of China in the global economy - that is, via the United Kingdom’s indirect links with China through its main trading partners.
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