Analysis of the Impact of China's GDP Data Revision on Monetary Policy from the Perspective of Uncertainty. Issue 6 (2nd May 2020)

• Record Type: Journal Article
• Authors: Yu, Xueting; Zhu, Yuhan; Lv, Guangming
• Is Part Of: Emerging markets finance & trade. Volume 56:Issue 6(2020)
• Page Start: 1251
• Page End: 1274
• Publication Date: 2020-05-02
• Subjects: Data uncertainty -- model uncertainty -- quarterly GDP data revision -- optimal monetary policy rules; C32 -- E32 -- E52; Balkan Peninsula -- Commerce -- Periodicals; Balkan Peninsula -- Foreign economic relations -- Periodicals; Europe, Central -- Commerce -- Periodicals; Europe, Central -- Foreign economic relations -- Periodicals; Europe, Eastern -- Commerce -- Periodicals; Europe, Eastern -- Foreign economic relations -- Periodicals; Turkey -- Commerce -- Periodicals; Turkey -- Foreign economic relations -- Periodicals; Asia -- Commerce -- Periodicals; Asia -- Foreign economic relations -- Periodicals; Eurasia -- Commerce -- Periodicals; Eurasia -- Foreign economic relations -- Periodicals; 382.05
• DOI: 10.1080/1540496X.2019.1695120
• Languages: English
• ISSNs: 1540-496X

Abstract

ABSTRACT: Based on the uncertainty brought about by the revision of GDP data, this article calculates the revision effect of GDP data uncertainty from 2000 to 2017 in China, analyzes the implications of GDP revision on output gap estimation, and estimates the effect of this uncertainty on monetary policy. The main results show the following: (1) GDP data revision indeed leads to noticeable uncertainty in the measured GDP and its growth rate in China. (2) The effect of data revision on the output gap shows a downward trend, and the results of the QT filter are most robust among the methods. (3) Controlling the uncertainty of the output gap model to a certain extent, the synchronism and forward-looking Taylor rules can describe China's monetary policy behavior, while considering the uncertainty of data, the synchronism Taylor rules perform best. The above conclusions have practical reference and policy implications.