| ID | 107999 |
| Title Proper | Inflation and economic growth in China |
| Other Title Information | an empirical analysis |
| Language | ENG |
| Author | Hwang, Jen-Te ; Wu, Ming-Jia |
| Publication | 2011. |
| Summary / Abstract (Note) | Using official provincial data for gross provincial product, consumer price index and other explanatory variables from 1986 to 2006, the present paper investigates the nonlinear effects of inflation on economic growth in China. The main finding of the study is that the inflation threshold effect is highly significant and robust in China. Above the 2.50 percent threshold, every 1-percentage point increase in the inflation rate impedes economic growth by 0.61 percent; below this threshold, every 1-percentage point increase in the inflation rate stimulates growth by 0.53 percent. This indicates that high inflation harms economic growth, whereas moderate inflation benefits growth. We suggest that China should maintain a moderate inflation rate for long-run growth. |
| `In' analytical Note | China and World Economy Vol. 19, No. 5; Sep-Oct 2011: p.67-84 |
| Journal Source | China and World Economy Vol. 19, No. 5; Sep-Oct 2011: p.67-84 |
| Key Words | China ; Growth ; Inflation ; Nonlinearity ; Threshold Effect |