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Financial cycles in the economy and in economic research: a case study in China

    Yong Qin Affiliation
    ; Zeshui Xu Affiliation
    ; Xinxin Wang Affiliation
    ; Marinko Škare Affiliation
    ; Małgorzata Porada-Rochoń Affiliation

Abstract

This work explores the relationship between financial cycles in the economy and in economic research. To this aim, we take China as an empirical example, and an intuitive bibliometric analysis of selected terms concerning financial cycles in economic research is performed first. Both in the economy and in economic research, we then conduct singular spectrum analysis to further isolate and describe the specific length and amplitude of financial cycles for China based on quarterly time-series data. Finally, according to the estimated cycles that detrended by Hodrick-Prescott filter for financial and bibliometric variables, the Granger causality test scrutinizes the results of the first two steps. Moreover, a time-varying parameter vector autoregression model is estimated to quantitatively investigate the time-varying interaction between financial and bibliometric variables. Our study shows that financial cycles have a strong effect on the developments in the financial-related literature. In particular, the 2008 global financial crisis’s impulse intensity is significantly higher than in other periods. Surprisingly, discussions on financial cycles in the literature also have an impact on financial activities in real life. These findings contribute to nascent work on the patterns in financial cycles, thus providing a new and effective insight on the interpretation of financial activities.

Keyword : financial cycles, bibliometric analysis, singular spectrum analysis, Granger causality test, TVP-VAR model

How to Cite
Qin, Y., Xu, Z., Wang, X., Škare, M., & Porada-Rochoń, M. (2021). Financial cycles in the economy and in economic research: a case study in China. Technological and Economic Development of Economy, 27(5), 1250-1279. https://doi.org/10.3846/tede.2021.15439
Published in Issue
Oct 5, 2021
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This work is licensed under a Creative Commons Attribution 4.0 International License.

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