Regional Inflation in China

Nagayasu, Jun (2009): Regional Inflation in China.

Abstract

This paper empirically examines developments in price and inflation in China from 1991 to 2005. Unlike most previous studies, their determinants were investigated in the panel data context, and our findings are as follows. First, using the panel cointegration method, we confirm a long-run relationship between price, money and output. Secondly, we provide evidence that inflation can be explained by economic fundamentals such as money, credits, productivity, and exchange rate growth. Furthermore, while an increased concern about regional discrepancies in recent years, this relationship is more sensitive to the sample period than to the region type. Notably, money does not seem to be closely associated with inflation over recent years.

• Item Type: MPRA Paper
• Language: English
• Keywords: China, inflation, panel data, panel cointegration
• Subjects: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E50 - General; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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