Empirical estimations of the micro-founded New Keynesian Phillips Curve (NKPC) using rational inflation expectation proxies have often found that the output gap is an invalid measure of inflation pressure. This paper investigates the empirical success of the NKPC in explaining US inflation when...

This paper constructs a quarterly series of GDP deflator inflation for China from 1979 to 2009 and tests for a structural break with an unknown change point in the dynamic inflation process. Empirical results suggest a significant structural change in inflation persistence. Employing a...

This paper employs the recently developed structural stability tests with unknown break point and two median unbiased estimation methods to model China inflation persistence over the most recent quarter of a century. Our empirical results suggest that the persistence of both consumer price...

This paper examines whether the major components of China's real gross domestic product (GDP) have exhibited smoother, less volatile growth since the late 1990s, and, if so, what has caused this "great moderation" in their growth. Employing unknown-structural-breakpoint tests and constructing a...

Using the Bayesian multivariate Beveridge-Nelson decomposition method, this paper estimates China's output gap based on a multivariate dynamic model featuring distinct interactions among real output, inflation, money, and the exchange rate in China during the period 1980-2010. The authors...

This paper shows that the error term in the stylized New Keynesian Phillips curve (NKPC) model for China is significantly serially correlated. We propose an extended NKPC model for China, which can be easily rationalized in terms of sticky-price setting of backward-looking firms. Empirical...

Purpose – China has witnessed low and stable consumer price inflation in conjunction with high and volatile food price inflation over the past decade. The purpose of this paper is to examine questions about whether or not the link between consumer price inflation and food price inflation has...