This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Output Gaps and Inflation in Mainland China

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Stefan Gerlach (Bank for International Settlements)
Wensheng Peng (Hong Kong Monetary Authority)

Additional information is available for the following registered author(s):

Abstract

We estimate output gaps using three methods for Mainland China on annual data spanning 1982-2003. The estimates are similar and appear to co-move with inflation. Standard Phillips curves, however, do not fit the data well. This may reflect the omission of some important variable(s) such as the effect of price deregulation, trade liberalisation and/or changes in the exchange rate regime. We reestimate the Phillips curves assuming that there is an unobserved variable that follows an AR(2) process. The modified model fits the data much better and accounts for some of the surprising features of the simple Phillips curve estimates.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.hkimr.org/cms/upload/publication_app/pub_full_0_2_120_wp200520_text.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Hong Kong Institute for Monetary Research in its series Working Papers with number 202005.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 23 pages
Date of creation: Nov 2005
Date of revision:
Handle: RePEc:hkm:wpaper:202005

Contact details of provider:
Postal: 55th Floor , Two International Finance Centre , 8 Finance Street , Central, Hong Kong
Phone: (852)2878 1978
Fax: (852)2878 7006
Email:
Web page: http://www.hkimr.org
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (HKIMR).

Related research
Keywords: output gap; Phillips curve; China; omitted variab les;

Other versions of this item:

Find related papers by JEL classification:
C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions
E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
E53 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Deposit Insurance

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Gerlach, Stefan & Yiu, Matthew S., 2004. "Estimating output gaps in Asia: A cross-country study," Journal of the Japanese and International Economies, Elsevier, vol. 18(1), pages 115-136, March. [Downloadable!] (restricted)
  2. Wing Thye Woo, 2003. "The Travails of Current Macroeconomic and Exchange Rate Management in China: The Complications of Switching to a New Growth Engine," Development and Comp Systems 0310001, EconWPA. [Downloadable!]
  3. Clark, Peter K., 1989. "Trend reversion in real output and unemployment," Journal of Econometrics, Elsevier, vol. 40(1), pages 15-32, January. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Chengsi Zhang, 2009. "Structural instability of China inflation dynamics," Frontiers of Economics in China, Springer, vol. 4(1), pages 30-45, March. [Downloadable!] (restricted)
  2. Osman, Mohammad & Louis, Rosmy & Balli, Faruk, 2008. "Which Output Gap Measure Matters for the Arab Gulf Cooperation Council Countries (AGCC): The Overall GDP Output Gap or the Non-Oil Sector Output Gap?," MPRA Paper 11612, University Library of Munich, Germany. [Downloadable!]
  3. Alice Y. Ouyang & Ramkishen S. Rajan & Thomas D. Willett, 2007. "China as a Reserve Sink: The Evidence from Offset and Sterilization Coefficients," Working Papers 102007, Hong Kong Institute for Monetary Research. [Downloadable!]
  4. Kaaresvirta, Juuso & Mehrotra, Aaron, 2009. "Business surveys and inflation forecasting in China," BOFIT Discussion Papers 22/2008, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
  5. Aaron Mehrotra & Tuomas Peltonen & Alvaro Santos Rivera, 2007. "Modelling inflation in China - a regional perspective," Working Paper Series 829, European Central Bank. [Downloadable!]
    Other versions:
  6. Joerg Scheibe & David Vines, 2005. "A Phillips Curve For China," CAMA Working Papers 2005-02, Australian National University, Centre for Applied Macroeconomic Analysis. [Downloadable!]
    Other versions:
  7. Matthieu Bussière & Arnaud Mehl, 2008. "China's and India's roles in global trade and finance - twin titans for the new millennium?," Occasional Paper Series 80, European Central Bank. [Downloadable!]
  8. Antonin Rusek, 2008. "Inflation Dynamics in New EU Member States: The Czech Case," International Advances in Economic Research, Springer, vol. 14(2), pages 191-204, May. [Downloadable!] (restricted)
Statistics
Access and download statistics

Did you know? IDEAS also computes impact factors for journals and working paper series.

This page was last updated on 2009-11-22.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.