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

Abstract

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.

Suggested Citation

Cesa-Bianchi, Ambrogio and Stratford, Kate, How Could a Shock to Growth in China Affect Growth in the United Kingdom? (March 18, 2016). Bank of England Quarterly Bulletin 2016 Q1. Available at SSRN: https://ssrn.com/abstract=2759721 or http://dx.doi.org/10.2139/ssrn.2759721

Ambrogio Cesa-Bianchi (Contact Author)

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

HOME PAGE: http://https://sites.google.com/site/ambropo/

Kate Stratford

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

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