Initial Steps in High-Frequency Modeling of China

This paper presents the first step in building a forecasting model of Chinas GDP. Being constrained by a statistical history that effectively begins in 1993, it uses high frequency data and principal components analysis to construct a single-equation model that generates elasticities and is applied to two-quarter-ahead forecasts. Initial results suggest a gradual deceleration of growth, consistent with Chinese government policy.A version of this paper was presented as part of Lawrence R. Kleins Adam Smith Award Address at the NABE Annual Meeting, October 4, 2004. The Adam Smith Award Address was sponsored by Global Insight.JEL Classification C5,O53