Yang Ji, Ran Li, Jingxian Zou
Author information
a Dongfang College, ZhejiangUniversity of Finance and Economics, Haining 314408, China
b Decision Science & Analytics, Scotiabank, Toronto, M5H 3R3, Canada
c Research Institute of Finance and Economics, Shanghai University of Finance and Economics, Shanghai 200433, China
E-mail: jiyangpku@163.com (Yang Ji) , lillianlee.pku@gmail.com (Ran Li), zoujingxian@gmail.com (Jingxian Zou)
Abstract
Is the “non-existence” of the Phillips curve in China a truth or just an illusion due to the deficiency of data? Should policy analysis follow the light of New-Keynesian or New-classical economics? These questions require empirical work on the Phillips curve, which has long been limited in China due to an inaccurate unemployment rate and unreliable estimated output gap. Instead of the insignificant or self-contradicting results in previous work, this paper puts forward a significant estimation, creatively using the vacancy-jobseeker ratio instead of the unemployment rate. It is suggested that a robust Phillips curve cannot be ignored and New-Keynesian economics should be employed in policy analysis in the short run.
Phillips curve, expected inflation, unemployment rate, China
Yang Ji, Ran Li, Jingxian Zou. Is the Phillips Curve Valid in China?. Front. Econ. China, 2015, 10(2): 335‒364 https://doi.org/10.3868/s060-004-015-0014-9