Estimating the Efficiency and Impacts of Petroleum Product Pricing Reforms in China
Chuxiong Deng (),
Zhujun Jiang () and
Chuanwang Sun ()
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Chuxiong Deng: College of Resources and Environmental Sciences, Hunan Normal University, Changsha 410081, Hunan, China
Zhujun Jiang: Institute of Finance and Economics Research, School of Urban and Regional Science, Shanghai University of Finance and Economics, Shanghai 200433, China
Sustainability, 2018, vol. 10, issue 4, 1-17
The efficiency and effects analysis of a new pricing mechanism would have significant policy implications for the further design of a pricing mechanism in an emerging market. Unlike most of the existing literature, which focuses on the impacts to the macro-economy, this paper firstly uses an econometrics model to discuss the efficiency of the new pricing mechanism, and then establishes an augmented Phillips curve to estimate the impact of pricing reform on inflation in China. The results show that: (1) the new pricing mechanism would strengthen the linkage between Chinese oil prices and international oil prices; (2) oil price adjustments are still inadequate in China. (3) The lag in inflation is the most important factor that affects inflation, while the impact of the Chinese government’s price adjustments on inflation is limited and insignificant. In order to improve the efficiency of the petroleum products pricing mechanism and shorten lags, government should shorten the adjustment period and diminish the fluctuation threshold.
Keywords: petroleum products pricing mechanism; price adjustment; augmented Phillips curve (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:10:y:2018:i:4:p:1080-:d:139614
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