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Are Chinese Growth and Inflation Too Smooth? Evidence from Engel Curves

Emi Nakamura, Jon Steinsson and Miao Liu ()

American Economic Journal: Macroeconomics, 2016, vol. 8, issue 3, 113-44

Abstract: China has experienced remarkably stable growth and inflation in recent years according to official statistics. We use systematic discrepancies between cross-sectional and time-series Engel curves to construct alternative estimates of Chinese growth and inflation. Our estimates suggest that official statistics present a smoothed version of reality. Official inflation rose in the 2000s, but our estimates indicate that true inflation was still higher and consumption growth was overstated. In contrast, inflation was overstated and growth understated during the low-inflation 1990s. These patterns hold for the food Engel curve, and for numerous other categories, such as grain as a fraction of food.

JEL-codes: C82 E21 E23 E31 O11 P24 (search for similar items in EconPapers)
Date: 2016
Note: DOI: 10.1257/mac.20150074
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Citations: View citations in EconPapers (34)

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Related works:
Working Paper: Are Chinese Growth and Inflation Too Smooth? Evidence from Engel Curves (2014) Downloads
Working Paper: Are Chinese Growth and Inflation Too Smooth? Evidence from Engel Curves (2014)
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