BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 6/2005:
Inflation in mainland China – modelling a roller coaster ride
Michael Funke ()
Abstract: 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; (follow links to similar papers)
JEL-Codes: C22; E31; (follow links to similar papers)
31 pages, July 8, 2005
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- This paper is published as:
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Funke, Michael, (2006), 'Inflation in mainland China – modelling a roller coaster ride', Pacific Economic Review, Vol. 11, pages 413-430
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