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A Model of Inflation in Taiwan

Author

Listed:
  • Gregory C. Chow

    (Princeton University & Academia Sinica, Taiwan)

Abstract

The model of Chow (1987) for inflation in China is applied to explain inflation in Taiwan. A cointegration relation linear in the log of a price index and the log of the ratio of money supply to output is estimated. Inflation is explained by the change in this log ratio, lagged inflation and the lagged residual of the cointegration relation as an error correction. The model explains Taiwan?s inflation well except during the oil crises of 1973 and 1979-80.

Suggested Citation

  • Gregory C. Chow, 2011. "A Model of Inflation in Taiwan," Working Papers 1333, Princeton University, Department of Economics, Center for Economic Policy Studies..
    • Handle: RePEc:pri:cepsud:220
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    File URL: https://gceps.princeton.edu/wp-content/uploads/2017/01/220chow.pdf
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    References listed on IDEAS

    as
    1. Chow, Gregory C., 1987. "Money and price level determination in China," Journal of Comparative Economics, Elsevier, vol. 11(3), pages 319-333, September.
    2. Chow, Gregory C. & Wang, Peng, 2010. "The empirics of inflation in China," Economics Letters, Elsevier, vol. 109(1), pages 28-30, October.
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    Cited by:

    1. Emna Trabelsi, 2022. "Macroprudential Transparency and Price Stability in Emerging and Developing Countries," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 11(1), pages 105-129.

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    More about this item

    Keywords

    inflation; Taiwan; error correction;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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