Abstract

To explore the relationship between the prices of shipping market and China's economy, this paper analyzes the data of BDI and China's GDP from 2000 to 2015. By stabilizing the BDI and GDP data, this paper identifies the one-way causal relationship between the BDI and China's GDP via the granger causality test. The conclusion shows that BDI effects China's GDP positively at rate of 22% by using impulse response function and variance decomposition method. Accordingly, this paper establishes VAR forecasting model of China's GDP, which has a good forecasting ability.

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