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Is the Phillips Curve Valid in China?

Author

Listed:
  • Yang Ji

    (National School of Development, Peking University, Beijing 100871, China)

  • Ran Li

    (National School of Development, Peking University, Beijing 100871, China)

  • Jingxian Zou

    (National School of Development, Peking University, Beijing 100871, China)

Abstract

Is the "non-existence¡± of the Phillips curve in China a truth or just an illusion due to the deficiency of data? Should policy analysis follow the light of New-Keynesian or New-classical economics? These questions require empirical work on the Phillips curve, which has long been limited in China due to an inaccurate unemployment rate and unreliable estimated output gap. Instead of the insignificant or self-contradicting results in previous work, this paper puts forward a significant estimation, creatively using the vacancy-jobseeker ratio instead of the unemployment rate. It is suggested that a robust Phillips curve cannot be ignored and New-Keynesian economics should be employed in policy analysis in the short run.

Suggested Citation

  • Yang Ji & Ran Li & Jingxian Zou, 2015. "Is the Phillips Curve Valid in China?," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 10(2), pages 335-364, June.
    • Handle: RePEc:fec:journl:v:10:y:2015:i:2:p:335-364
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    File URL: http://journal.hep.com.cn/fec/EN/10.3868/s060-004-015-0014-9
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    Citations

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    Cited by:

    1. Makram El-Shagi & Kiril Tochkov, 2023. "Regional Heterogeneity and the Provinicial Phillips Curve in China," CFDS Discussion Paper Series 2023/3, Center for Financial Development and Stability at Henan University, Kaifeng, Henan, China.

    More about this item

    Keywords

    Phillips curve; expected inflation; unemployment rate; China;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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