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Multivariate model-based gap measures and a new Phillips curve for China

  • Zhang, Chengsi
  • Murasawa, Yasutomo

This paper examines empirically the Phillips curve relationship for the Chinese economy. We use quarterly data that go back to 1978 and employ a multivariate rather than univariate method in the construction of gap measures for inflation, money and output jointly with reliable error bands. Our empirical results show that the inflation gap and the output gap fit a New Phillips curve very well. We also find some structural change in the inflation–output trade-off.

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Article provided by Elsevier in its journal China Economic Review.

Volume (Year): 23 (2012)
Issue (Month): 1 ()
Pages: 60-70

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Handle: RePEc:eee:chieco:v:23:y:2012:i:1:p:60-70
Contact details of provider: Web page: http://www.elsevier.com/locate/chieco

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  1. Chengsi Zhang & Denise R. Osborn & Dong Heon Kim, 2006. "The New Keynesian Phillips Curve: from Sticky Inflation to Sticky Prices," The School of Economics Discussion Paper Series 0631, Economics, The University of Manchester.
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