A Model of Inflation in Taiwan

Gregory Chow
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Gregory Chow: Princeton University & Academia Sinica, Taiwan

No 1333, Working Papers from Princeton University, Department of Economics, Center for Economic Policy Studies.

Abstract: The model of Chow (1987) for inflation in China is applied to explain inflation in Taiwan. A cointegration relation linear in the log of a price index and the log of the ratio of money supply to output is estimated. Inflation is explained by the change in this log ratio, lagged inflation and the lagged residual of the cointegration relation as an error correction. The model explains Taiwan?s inflation well except during the oil crises of 1973 and 1979-80.

Keywords: inflation; Taiwan; error correction (search for similar items in EconPapers)
JEL-codes: E31 O11 (search for similar items in EconPapers)
Date: 2011-09
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pri:cepsud:220

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