- Title: Mr
- Position: PhD Student - Department of Economics
- Principal supervisor: Ms Natalia Ponomareva
- Associate supervisor: Dr Christopher Heaton
- Thesis title: Modeling Chinese economy
- Abstract: Existing literature on modeling Chinese economy is limited, especially for post-GFC period. This thesis aims to develop a model for China’s economy using the factor model. The factor model is suitable to adjust the poor quality data and the rapid change of economic structure in China. Following Stock and Watson dynamic factor model, the predictors are summarised using a small number of indexes constructed by principal component analysis. The method is then used to construct model of China’s economy using 40 monthly variables from 1985 to 2014. Parameter constancy of the factor model is evaluated and forecasts for multi-step ahead are presented.