Wage and Price Dynamics in a Large Emerging Economy: The Case of China
26 Pages Posted: 26 Jan 2014
Date Written: January 20, 2014
Abstract
This study finds that the growth in labour costs in China is not passed through fully to final prices in China, neither in the tradable goods sector nor in the economy as a whole. This probably reflects the strong pressure on profit margins from a highly competitive environment, especially in manufactured goods. The potential implications of labour cost increases in China for global inflation pressures are also discussed.
Keywords: labour costs, inflation, China, global economic slack, globalisation
JEL Classification: E31, F42, J30
Suggested Citation: Suggested Citation
Holz, Carsten A. and Mehrotra, Aaron N., Wage and Price Dynamics in a Large Emerging Economy: The Case of China (January 20, 2014). BOFIT Discussion Paper No. 3/2014, Available at SSRN: https://ssrn.com/abstract=2384539 or http://dx.doi.org/10.2139/ssrn.2384539
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