A study of inflation in China

This paper seeks to find the determinants of inflation in China from both a qualitative and quantitative perspective during the period 2000-2011. In the qualitative analysis, we employ the aggregate demand/aggregate supply (AD/AS) framework to construct a mixed inflation model which postulates that...

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Main Authors: Hu, Xiaoli, Xu, Jiajia, Yang, Wanyu
Other Authors: Tan Kim Heng
Format: Final Year Project
Language:English
Published: 2012
Subjects:
Online Access:http://hdl.handle.net/10356/48483
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Institution: Nanyang Technological University
Language: English
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spelling sg-ntu-dr.10356-484832019-12-10T14:22:20Z A study of inflation in China Hu, Xiaoli Xu, Jiajia Yang, Wanyu Tan Kim Heng School of Humanities and Social Sciences DRNTU::Social sciences::Economic theory::Macroeconomics DRNTU::Social sciences::Economic development::China This paper seeks to find the determinants of inflation in China from both a qualitative and quantitative perspective during the period 2000-2011. In the qualitative analysis, we employ the aggregate demand/aggregate supply (AD/AS) framework to construct a mixed inflation model which postulates that the potential determinants of inflation in China are money supply or bank loans, real Gross Domestic Product (GDP), real effective exchange rate, international commodity prices, average nominal wages and inflationary expectations. In the quantitative analysis, with the autoregressive distributed lag (ARDL) framework, we first identify the long run determinants of inflation, and then an error correction model (ECM) is employed to estimate the short run dynamics. We remark that in the long run, the primary source of inflation in China is growth of money supply or bank loans. In the short run, we conclude that while both growth of money supply or bank loans and inflationary expectations influence China’s inflation, inflationary expectations play a more important role. Bachelor of Arts 2012-04-24T08:45:47Z 2012-04-24T08:45:47Z 2012 2012 Final Year Project (FYP) http://hdl.handle.net/10356/48483 en Nanyang Technological University 52 p. application/pdf
institution Nanyang Technological University
building NTU Library
country Singapore
collection DR-NTU
language English
topic DRNTU::Social sciences::Economic theory::Macroeconomics
DRNTU::Social sciences::Economic development::China
spellingShingle DRNTU::Social sciences::Economic theory::Macroeconomics
DRNTU::Social sciences::Economic development::China
Hu, Xiaoli
Xu, Jiajia
Yang, Wanyu
A study of inflation in China
description This paper seeks to find the determinants of inflation in China from both a qualitative and quantitative perspective during the period 2000-2011. In the qualitative analysis, we employ the aggregate demand/aggregate supply (AD/AS) framework to construct a mixed inflation model which postulates that the potential determinants of inflation in China are money supply or bank loans, real Gross Domestic Product (GDP), real effective exchange rate, international commodity prices, average nominal wages and inflationary expectations. In the quantitative analysis, with the autoregressive distributed lag (ARDL) framework, we first identify the long run determinants of inflation, and then an error correction model (ECM) is employed to estimate the short run dynamics. We remark that in the long run, the primary source of inflation in China is growth of money supply or bank loans. In the short run, we conclude that while both growth of money supply or bank loans and inflationary expectations influence China’s inflation, inflationary expectations play a more important role.
author2 Tan Kim Heng
author_facet Tan Kim Heng
Hu, Xiaoli
Xu, Jiajia
Yang, Wanyu
format Final Year Project
author Hu, Xiaoli
Xu, Jiajia
Yang, Wanyu
author_sort Hu, Xiaoli
title A study of inflation in China
title_short A study of inflation in China
title_full A study of inflation in China
title_fullStr A study of inflation in China
title_full_unstemmed A study of inflation in China
title_sort study of inflation in china
publishDate 2012
url http://hdl.handle.net/10356/48483
_version_ 1681049098978852864