Deflation in China

Sylviane Guillaumont Jeanneney () and GUERINEAU Samuel ()
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GUERINEAU Samuel: Centre d'Etudes et de Recherches sur le Développement International

No 200323, Working Papers from CERDI

Abstract: This article investigates the causes of the deflation which occurs in China since 1998. The analysis is based on a theoretical model which addresses supply shocks as well as demand shocks and on the estimation of a reduced equation of consumer prices variations for the period 1986-2002, the results of which corroborate the theoretical assumptions. The main conclusion is that the slowing down of inflation and the fall of prices are chiefly explained by China economic policy. Moreover and contrary to the current opinion we show that deflation is partly due to the deceleration of productivity growth.

Keywords: China; deflation; exchange rate anchorage; productivity growth (search for similar items in EconPapers)
Date: 2003

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Persistent link: http://EconPapers.repec.org/RePEc:cdi:wpaper:449

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