ABSTRACT
The core issue under consideration in this study is the implication for the world economies of a prolonged economic Chinese slowdown, as the economy keeps growing at lower levels of growth rates, or at what has been euphemistically coined as the ‘new normal’ growth rate. Using econometric techniques over the period 2013–2015, the research findings indicate that a market shock originating in the Shanghai stock exchange would have limited repercussions for the global economy as a whole, and that it would be felt at the regional level with some expected spillover effects towards the global markets. This is due to the fact that the Chinese stock market is still not fully integrated in the world major stock markets. The research findings do not offer significant evidence of a long run relationship between the studied stock markets and commodities. Furthermore, Granger causal relationships seem to be running in a unidirectional manner from major stock exchanges, and commodities such as gold and soybeans. On the other hand, a causal effect with origins in market volatility was recorded running in a bidirectional manner.
