Chinese Economic Growth Projections Based on Mixed Data of Carbon Emissions under the COVID-19 Pandemic

Abstract

Current research on carbon emissions and economic development has tended to apply more homogeneous low-frequency data to construct VAR models with impulse responses, ignoring some of the sample information in high-frequency data. This study constructs a MIDAS model to forecast GDP growth rate based on monthly carbon emission data and quarterly GDP data in the context of the COVID-19 pandemic. The results show that: (1) The MIDAS model has smaller RMSE than the VAR model in short-term forecasting, and provides more stable real-time forecasts and short-term forecasts of quarterly GDP growth rates, which can provide more accurate reference intervals; (2) China’s future macroeconomic growth rate has recently declined due to the impact of the sudden epidemic, but the trend is generally optimistic. By improving urban planning and other methods, the authorities can achieve the two-carbon goal of carbon capping and carbon neutrality at an early date. In the context of the impact of COVID-19 on China’s economic development, we need to strike a balance between ensuring stable economic growth and ecological protection, and build environmentally friendly cities, so as to achieve sustainable economic and ecological development and enhance human well-being.