Inflation in Mainland China - Modelling a Roller Coaster Ride

Institute for Monetary and Financial Research, Hong Kong

doi:10.2139/ssrn.1008774

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Inflation in Mainland China - Modelling a Roller Coaster Ride

Hong Kong Institute for Monetary and Financial Research (HKIMR) Research Paper WP No. 15/2005

Pacific Economic Review, 11(4), 2006, pp. 413-429

21 Pages Posted: 23 Aug 2007 Last revised: 8 Aug 2022

See all articles by Hong Kong Institute for Monetary and Financial Research

Hong Kong Institute for Monetary and Financial Research

(HKIMR)

There are 2 versions of this paper

Date Written: August 1, 2005

Abstract

This working paper was written by Michael Funke (Hamburg University).

The New Keynesian Phillips curve (NKPC) posits the dynamics of inflation as forward looking and related to marginal costs. In this paper we examine the empirical relevance of the NKPC for mainland China. The empirical results indicate that an augmented (hybrid) NKPC gives results that are consistent with the data generating process. It is in this respect that the NKPC provides useful insights into the nature of inflation dynamics in mainland China as well as useful insights for the conduct of monetary policy.

Keywords: China, inflation, New Keynesian Phillips curve

JEL Classification: C22, E31

Suggested Citation: Suggested Citation

Institute for Monetary and Financial Research, Hong Kong, Inflation in Mainland China - Modelling a Roller Coaster Ride (August 1, 2005). Hong Kong Institute for Monetary and Financial Research (HKIMR) Research Paper WP No. 15/2005, Pacific Economic Review, 11(4), 2006, pp. 413-429, Available at SSRN: https://ssrn.com/abstract=1008774 or http://dx.doi.org/10.2139/ssrn.1008774