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Tracking Chinese CPI inflation in real time

  • Michael Funke

    ()

  • Hao Yu

    ()

  • Aaron Mehrota

    ()

With recovery from the global financial crisis in 2009 and 2010, inflation emerged as a major concern for many central banks in emerging Asia. We use data observed at mixed frequencies to estimate the movement of Chinese headline inflation within the framework of a state-space model, and then take the estimated indicator to nowcast Chinese CPI infla-tion. The importance of forward-looking and high-frequency variables in tracking inflation dynamics is highlighted and the policy implications discussed.

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Paper provided by Hamburg University, Department of Economics in its series Quantitative Macroeconomics Working Papers with number 21112.

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Date of creation: Dec 2011
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Handle: RePEc:ham:qmwops:21112
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