Exporting Deflation? Chinese Exports and Japanese Prices

David Weinstein and Christian Broda

No 13942, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Between 1992 and 2002, the Japanese Import Price Index registered a decline of almost 9 percent and Japan entered a period of deflation. We show that much of the correlation between import prices and domestic prices was due to formula biases. Had the IPI been computed using a pure Laspeyres index like the CPI, the IPI would have hardly moved at all. A Laspeyres version of the IPI would have risen 1 percentage point per year faster than the official index. Second we show that Chinese prices did not behave differently from the prices of other importers. Although Chinese prices are substantially lower than the prices of other exporters, they do not exhibit a differential trend. However, we estimate that the typical price per unit quality of a Chinese exporter fell by half between 1992 and 2005. Thus the explosive growth in Chinese exports is attributable to growth in the quality of Chinese exports and the increase in new products being exported by China.

JEL-codes: E31 F1 F12 (search for similar items in EconPapers)
Date: 2008-04
New Economics Papers: this item is included in nep-cna, nep-int and nep-mac
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Published as Exporting Deflation? Chinese Exports and Japanese Prices , Christian Broda, David E. Weinstein. in China's Growing Role in World Trade , Feenstra and Wei. 2010

Downloads: (external link)
http://www.nber.org/papers/w13942.pdf (application/pdf)

Related works:
Chapter: Exporting Deflation? Chinese Exports and Japanese Prices (2010)
Working Paper: Exporting deflation? Chinese exports and Japanese prices (2008)
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:nbr:nberwo:13942

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w13942

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().