Markov Switching Model With Bounce-Back Effect: An Application to Chinese Business Cycle

Xiaobin TANG, Li DONG, Ying DONG

Abstract


Based on Markov switching model with a bounce-back effect, this paper analyzes the data of the economic growth in China. The findings suggest that Markov switching model with a rebound effect fits the macroeconomic growth data in our country better. What’s more, we can also see that the economic fluctuation in our country not only is characterized by its obvious nonlinearity and asymmetry but has significant “bounce-back effect”.


Keywords


Bounce-back effect; Markov-switching model; Business cycle

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References


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DOI: http://dx.doi.org/10.3968/5565

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