Chinese Economy's Unique Volatility Explained by Asymmetric Preferences and Trade Shocks
The article looks at why the Chinese economy fluctuates and how well theoretical models can explain it. By studying economic volatility, the researchers found that unique factors like asymmetric preference, incomplete financial markets, and terms of trade shocks play a big role in predicting the Chinese economy's ups and downs. One interesting finding is that negative international investment trends are a key feature of the Chinese economy, and the model they developed can accurately capture this aspect.