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Multivariate model-based gap measures and a new Phillips curve for China

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  • Zhang, Chengsi
  • Murasawa, Yasutomo

Abstract

This paper examines empirically the Phillips curve relationship for the Chinese economy. We use quarterly data that go back to 1978 and employ a multivariate rather than univariate method in the construction of gap measures for inflation, money and output jointly with reliable error bands. Our empirical results show that the inflation gap and the output gap fit a New Phillips curve very well. We also find some structural change in the inflation–output trade-off.

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Bibliographic Info

Article provided by Elsevier in its journal China Economic Review.

Volume (Year): 23 (2012)
Issue (Month): 1 ()
Pages: 60-70

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Handle: RePEc:eee:chieco:v:23:y:2012:i:1:p:60-70

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Web page: http://www.elsevier.com/locate/chieco

Related research

Keywords: Phillips curve; Bayesian estimator; Output gap; Structural change;

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