Are Prices Sticky in Large Developing Economies? An Empirical Comparison of China and India

Terence Tai Leung Chong, Tingting Zhu and M.S. Rafiq

MPRA Paper from University Library of Munich, Germany

Abstract: This paper compares the role of macroeconomic and sector-specific factors in price movements for China and India, taking into account the features unique to developing economies. We find that fluctuations in the aggregated prices in China are more persistent than the underlying disaggregated prices. Compared to China, prices in India respond more promptly to macroeconomic and monetary policy shocks. We also show that the urban CPI in China responds more sharply than rural CPI when facing sector-specific shocks, while the opposite is true for India.

Keywords: Disaggregated Prices; Persistence; Common Factors. (search for similar items in EconPapers)
JEL-codes: E31 E32 E52 (search for similar items in EconPapers)
Date: 2013-12-31
New Economics Papers: this item is included in nep-cna, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: ARE PRICES STICKY IN LARGE DEVELOPING ECONOMIES? AN EMPIRICAL COMPARISON OF CHINA AND INDIA (2019)
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