Identifying the Shocks Driving Inflation in China
Abstract
The time profile of inflation in China resembles the one experienced in major industrial countries. Given the uncertainty surrounding the sources of economic shocks, this paper compares results from three sets of alternative identification conditions, namely the standard Blanchard-Quah approach, the approach of Cover, Enders, and Hueng (2006), as well as the model considered by Bordo, Landon-Lane and Redish (2004). Our principal finding is that inflation in China has been primarily driven by monetary factors. While aggregate supply factors may have pushed inflation to cross the threshold leading to deflation, monetary policy is primarily responsible for Chinese inflationary outcomes.Download Info
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Paper provided by The Rimini Centre for Economic Analysis in its series Working Paper Series with number 34-07.Length:
Date of creation: Jul 2007
Date of revision: Jul 2007
Handle: RePEc:rim:rimwps:34-07
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Related research
Keywords:Other versions of this item:
- PierreL. Siklos & Yang Zhang, 2010. "Identifying The Shocks Driving Inflation In China," Pacific Economic Review, Wiley Blackwell, vol. 15(2), pages 204-223, 05.
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
- C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-11-10 (All new papers)
- NEP-CBA-2007-11-10 (Central Banking)
- NEP-CNA-2007-11-10 (China)
- NEP-MAC-2007-11-10 (Macroeconomics)
- NEP-MON-2007-11-10 (Monetary Economics)
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Richard CK Burdekin & Ilan Noy, 2005. "What Has Driven Chinese Monetary Policy Since 1990? Investigating the People's Bank's Policy Rule," Economics Study Area Working Papers 85, East-West Center, Economics Study Area.
- Hans Genberg & Pierre L. Siklos, 2009.
"Revisiting the Shocking Aspects of Asian Monetary Unification,"
Working Papers
192009, Hong Kong Institute for Monetary Research.
- Genberg, Hans & Siklos, Pierre L., 2010. "Revisiting the shocking aspects of Asian monetary unification," Journal of Asian Economics, Elsevier, vol. 21(5), pages 445-455, October.
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