The strength of the inflation-output link in China

Mikael Juselius and Wenzhe Li

No 1353, BIS Working Papers from Bank for International Settlements

Abstract: We systematically investigate the relationship between China's inflation, eco nomic slack, and expectations through the lens of New Keynesian Phillips Curves (NKPC). Extending existing research, we employ inflation expectations from Con sensus Economics over recent samples and assess the stability of the estimates. Despite China's unique and evolving institutions, NKPC estimates are stable and show significant roles for both the output gap and inflation expectations in contrast to previous findings. Incorporating open-economy variables marginally enhances the models performance. Our results suggest that the New Keynesian framework can be adopted to China without adjustments for specific institutional features.

Keywords: China; inflation; New Keynesian Phillips Curve; emerging markets (search for similar items in EconPapers)
JEL-codes: E31 E37 E58 (search for similar items in EconPapers)
Date: 2026-05
New Economics Papers: this item is included in nep-mon
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.bis.org/publ/work1353.pdf Full PDF document (application/pdf)
https://www.bis.org/publ/work1353.htm (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bis:biswps:1353

Access Statistics for this paper

More papers in BIS Working Papers from Bank for International Settlements Contact information at EDIRC.
Bibliographic data for series maintained by Martin Fessler ().