Template-Type: ReDIF-Paper 1.0
Author-Name: Mikael Juselius
Author-X-Name-First: Mikael
Author-X-Name-Last: Juselius
Author-Name: Wenzhe Li
Author-X-Name-First: Wenzhe
Author-X-Name-Last: Li
Title: The strength of the inflation-output link in China
Abstract: We systematically investigate the relationship between China's inflation, eco nomic slack, and expectations through the lens of New Keynesian Phillips Curves (NKPC). Extending existing research, we employ inflation expectations from Con sensus Economics over recent samples and assess the stability of the estimates. Despite China's unique and evolving institutions, NKPC estimates are stable and show significant roles for both the output gap and inflation expectations in contrast to previous findings. Incorporating open-economy variables marginally enhances the models performance. Our results suggest that the New Keynesian framework can be adopted to China without adjustments for specific institutional features.
Creation-Date: 2026-05
File-URL: https://www.bis.org/publ/work1353.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work1353.htm
File-Format: text/html
Number: 1353
Keywords: China, inflation, New Keynesian Phillips Curve, emerging markets
Classification-JEL: E31, E37, E58
Handle: RePEc:bis:biswps:1353