Research on the Impacts of Hidden Short-term International Capital Flows on China’s Economy

Abstract

Hidden short-term international capital flows have complex and diverse impact channels which are difficult to supervise. This paper uses statistic software Eviews 8.0 to make Johansen cointegration test, VECM model test, Granger causality test and impulse responses analysis based on the collection of quarterly data from 2004 to 2014. The results show that hidden short-term international capital flows have huge and unstable impact upon China’s economy, therefore, we put forward policy suggestions based on the conclusion of empirical results.