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Will China Have Serious Inflation?

Author

Listed:
  • Gregory C. Chow

    (Princeton University)

Abstract

There has been much concern about inflation in China recently. The People's Bank in the last few months has raised the reserve requirement several times to control the money supply to slow down inflation. In 1985 when I was organizing a summer workshop on macroeconomics in cooperation with the Ministry of Education, Premier Zhao Ziyang asked me to forecast inflation in 1985-1986 because in 1984 the supply of money in the form of currency in circulation increased by 50 percent. I estimated an equation using data from 1952 to 1984 to explain inflation and used the equation to project forward to forecast an inflation rate for 1985 of no more than 9 percent which turned out to be correct. This equation was published in Chow (1987, equation 18) and updated using data up to 2004 in Chow (2007, pp. 34-5).

Suggested Citation

  • Gregory C. Chow, 2010. "Will China Have Serious Inflation?," Working Papers 1220, Princeton University, Department of Economics, Center for Economic Policy Studies..
    • Handle: RePEc:pri:cepsud:205
    as

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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.
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    More about this item

    Keywords

    inflation; china; Peoples Bank; money supply;
    All these keywords.

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East

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