American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Are Chinese Growth and Inflation Too Smooth? Evidence from Engel Curves
American Economic Journal: Macroeconomics
vol. 8,
no. 3, July 2016
(pp. 113–44)
(Complimentary)
Abstract
China has experienced remarkably stable growth and inflation in recent years according to official statistics. We use systematic discrepancies between cross-sectional and time-series Engel curves to construct alternative estimates of Chinese growth and inflation. Our estimates suggest that official statistics present a smoothed version of reality. Official inflation rose in the 2000s, but our estimates indicate that true inflation was still higher and consumption growth was overstated. In contrast, inflation was overstated and growth understated during the low-inflation 1990s. These patterns hold for the food Engel curve, and for numerous other categories, such as grain as a fraction of food.Citation
Nakamura, Emi, Jón Steinsson, and Miao Liu. 2016. "Are Chinese Growth and Inflation Too Smooth? Evidence from Engel Curves." American Economic Journal: Macroeconomics, 8 (3): 113–44. DOI: 10.1257/mac.20150074Additional Materials
JEL Classification
- C82 Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
- E21 Macroeconomics: Consumption; Saving; Wealth
- E23 Macroeconomics: Production
- E31 Price Level; Inflation; Deflation
- O11 Macroeconomic Analyses of Economic Development
- P24 Socialist Systems and Transitional Economies: National Income, Product, and Expenditure; Money; Inflation
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