Regional Pull vs Global Push Factors: China and US Influence on Asia-Pacific Financial Markets
30 Pages Posted: 13 Sep 2016
Date Written: September 2016
This paper compares spillovers from the US and Chinese financial markets to the rest of Asia-Pacific. Structural VAR analysis points to the growing influence of Chinese equities and currency movements. In normal times China's influence in the equity market has risen to a level close to that of the United States, although the relative impact of the United States became stronger in crisis periods. Nonetheless, China's bond market remains a negligible player. The influence of China may be interpreted as a "regional pull" factor, while that of the United States remains a key "global push" factor.
Keywords: China's impact, spillovers to Asian financial markets, US, structural VAR, sign restrictions
JEL Classification: F30, G15
Suggested Citation: Suggested Citation