BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 35/2011:
Tracking Chinese CPI inflation in real time
Aaron Mehrotra ()
, Michael Funke and Hao Yu
Abstract: With recovery from the global financial crisis in 2009 and
2010, inflation emerged as a major concern for many central banks in
emerging Asia. We use data observed at mixed frequencies to estimate the
movement of Chinese headline inflation within the framework of a
state-space model, and then take the estimated indicator to nowcast Chinese
CPI inflation. The importance of forward-looking and high-frequency
variables in tracking inflation dynamics is highlighted and the policy
implications discussed.
Keywords: nowcasting; CPI inflation cycle; mixed-frequency modelling; dynamic factor model; China; (follow links to similar papers)
JEL-Codes: C53; E31; E37; (follow links to similar papers)
35 pages, December 22, 2011
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