Black Swan Event: An Evidence from China’s Economics Efects

CBU INTERNATIONAL CONFERENCE ON INNOVATIONS IN SCIENCE AND EDUCATION 2020 (ECONOMICS AND BUSINESS)

8 Pages Posted: 15 Jan 2021

See all articles by Elena Velkova Stavrova

Elena Velkova Stavrova

South-West University "Neofit Rilski"

Mariya Paskaleva

South-West University "Neofit Rilski"

Ani Stoykova

South-West University "Neofit Rilski"

Date Written: January 13, 2021

Abstract

The prognosis of upcoming crises and the course of actually understanding them is increasingly becoming a major subject of discussions in pursuit of reliable indicators. The trade war between the United States and China, along with the COVID-19 pandemic are two events that took place in the Chinese economy with the aforementioned characteristics of the Black swan phenomenon, to which this latest professional analysis is devoted. The objective of this research is to examine the response of the Shanghai Stock Exchange Composite (SSEC) index, in addition to its relation with macroeconomic variables contributing towards a possible Black Swan Event. We employ an econometric methodology comprising of a unit root test, descriptive statistics, linear regression and correlation analysis for the period 2007-2019. Our results illustarte that the bubble from 2015, which is classified as a Black Swan event by many researchers, has a negative influence on the SSEC index. We can further deduce that there were some psychological effects on the Chinese stock market that lead to both, positive and negative trends of SSEC indices. The main findings confirmed that the Consumer Price Index, Exchange Rate, Interest Rate, Unemployment, GDP and Trade Balance were significantly elaborative macroeconomic variables, that had a substantial impact on the SSEC index.

Keywords: : Black Swan crisis and China's economy, macroeconomic indicators, stock market index, correlation.

JEL Classification: E44, G15, G17, H12

Suggested Citation

Stavrova, Elena Velkova and Paskaleva, Mariya and Stoykova, Ani, Black Swan Event: An Evidence from China’s Economics Efects (January 13, 2021). CBU INTERNATIONAL CONFERENCE ON INNOVATIONS IN SCIENCE AND EDUCATION 2020 (ECONOMICS AND BUSINESS), Available at SSRN: https://ssrn.com/abstract=3765237

Elena Velkova Stavrova (Contact Author)

South-West University "Neofit Rilski" ( email )

2, Krali Marko str.
Blagoevgrad, 2700
Bulgaria

Mariya Paskaleva

South-West University "Neofit Rilski" ( email )

2, Krali Marko str.
Blagoevgrad, 2700
Bulgaria

Ani Stoykova

South-West University "Neofit Rilski" ( email )

2, Krali Marko str.
Blagoevgrad, 2700
Bulgaria

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