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Globalization and Changing Inflation Dynamics in China

Accepted version
Peer-reviewed

Type

Article

Change log

Authors

Zhang, Chengsi 
He, Huidong 

Abstract

This article investigates the changing impact of economic globalization on inflation in China over the post-reform era. We construct an inflation dynamics model with globalization factors from microeconomic foundations. Empirical results with quarterly data spanning from 1984 to 2012 show that in 1994 there was a significant structural change in the inflation dynamics model, after which China’s inflation responded more significantly to foreign economic slack while the slope of the inflation-domestic slack relation reduced substantively.

Description

Keywords

globalization, inflation, NKPC, inflation dynamics

Journal Title

Emerging Markets Finance and Trade

Conference Name

Journal ISSN

1540-496X
1558-0938

Volume Title

52

Publisher

Informa UK Limited
Sponsorship
This research is supported by the National Natural Science Foundation of China (No. 71173224).