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Business surveys and inflation forecasting in China

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  • Kaaresvirta, Juuso
  • Mehrotra, Aaron

Abstract

We use business survey data collected by the People's Bank of China for inflation forecast-ing. Some survey indicators lead to enhanced forecasting performance relative to the uni-variate benchmark model, especially for a period of moderate inflation. However, the esti-mated models do not do a good job of tracking the recent pickup in Chinese inflation, due to increases in food prices.

Suggested Citation

  • Kaaresvirta, Juuso & Mehrotra, Aaron, 2008. "Business surveys and inflation forecasting in China," BOFIT Discussion Papers 22/2008, Bank of Finland Institute for Emerging Economies (BOFIT).
    • Handle: RePEc:zbw:bofitp:bdp2008_022
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    References listed on IDEAS

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    1. repec:zbw:bofitp:2008_022 is not listed on IDEAS
    2. James H. Stock & Mark W. Watson, 2008. "Phillips curve inflation forecasts," Conference Series ; [Proceedings], Federal Reserve Bank of Boston.
    3. Aaron Mehrotra & José Sánchez-Fung, 2008. "Forecasting inflation in China," China Economic Journal, Taylor & Francis Journals, vol. 1(3), pages 317-322.
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    8. Aaron Mehrotra & Jouko Rautava, 2008. "Do sentiment indicators help to assess and predict actual developments of the Chinese economy?," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 6(3), pages 225-239.
    9. GERLACH, Stefan & Peng, Wensheng, 2006. "Output gaps and inflation in Mainland China," China Economic Review, Elsevier, vol. 17(2), pages 210-225.
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    Cited by:

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    2. Krzysztof Drachal, 2019. "Analysis of Agricultural Commodities Prices with New Bayesian Model Combination Schemes," Sustainability, MDPI, vol. 11(19), pages 1-23, September.
    3. Qin Zhang & He Ni & Hao Xu, 2023. "Forecasting models for the Chinese macroeconomy in a data‐rich environment: Evidence from large dimensional approximate factor models with mixed‐frequency data," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(1), pages 719-767, March.

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    More about this item

    Keywords

    inflation forecasting; business surveys; China;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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