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Inflation in mainland China – modelling a roller coaster ride

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Author Info
Funke, Michael () (Hamburg University)

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Abstract

The New Keynesian Phillips curve (NKPC) posits the dynamics of inflation as forward looking and related to marginal costs. In this paper we examine the empirical relevance of the NKPC for mainland China. The empirical results indicate that an augmented (hybrid) NKPC gives results that are consistent with the data generating process. It is in this respect that the NKPC provides useful insights into the nature of inflation dynamics in mainland China as well as useful insights for the conduct of monetary policy.

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Publisher Info
Paper provided by Bank of Finland, Institute for Economies in Transition in its series BOFIT Discussion Papers with number 6/2005.

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Length: 31 pages
Date of creation: 08 Jul 2005
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Publication status: Published in Pacific Economic Review, 2006, pages 413-430.
Handle: RePEc:hhs:bofitp:2005_006

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Keywords: China inflation New Keynesian Phillips curve

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Find related papers by JEL classification:
C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models
E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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References listed on IDEAS
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  1. Mehrotra, Aaron & Peltonen, Tuomas & Santos Rivera, Alvaro, 2007. "Modelling inflation in China – a regional perspective," BOFIT Discussion Papers 19/2007, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
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  2. Funke, Michael, 2005. "Inflation in mainland China – modelling a roller coaster ride," BOFIT Discussion Papers 6/2005, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
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