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The Balassa-Samuelson effect and inflation in the Chinese provinces

Author

Listed:
  • Sylviane GUILLAUMONT JEANNENEY

    (Centre d'Etudes et de Recherches sur le Développement International(CERDI))

  • Ping HUA

    (Centre National de la Recherche Scientifique(CNRS))

Abstract

The Balassa-Samuelson effect is employed to explain the observed differences in inflation between the Chinese provinces. A three-good model is proposed to better take account of the specific features of China. This model which includes, besides Balassa-Samuelson effect, demand side factors, is tested for 29 Chinese provinces using cross-sectional and panel data for the 1992-1999 period. The econometric results show that the hypothesis that the Balassa-Samuelson effect explains the durable differences in inflation between provinces is not refuted. This suggests that the Chinese economy broadly works as a market economy.

Suggested Citation

  • Sylviane GUILLAUMONT JEANNENEY & Ping HUA, 2001. "The Balassa-Samuelson effect and inflation in the Chinese provinces," Working Papers 200106, CERDI.
    • Handle: RePEc:cdi:wpaper:154
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    References listed on IDEAS

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    Cited by:

    1. Guo, Qian & Hall, Stephen G., 2010. "A Test of the Balassa-Samuelson Effect Applied to Chinese Regional Data," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 57-78, July.
    2. Hua, Ping, 2007. "Real exchange rate and manufacturing employment in China," China Economic Review, Elsevier, vol. 18(3), pages 335-353.
    3. Nagayasu, Jun, 2009. "Regional Inflation in China," MPRA Paper 24722, University Library of Munich, Germany.
    4. Shu-ki Tsang, 2002. "From "One Country, Two Systems" to Monetary Integration?," Working Papers 152002, Hong Kong Institute for Monetary Research.
    5. Sylviane GUILLAUMONT JEANNENEY & PING HUA & ZHICHENG LIANG, 2006. "Financial Development, Economic Efficiency, And Productivity Growth: Evidence From China," The Developing Economies, Institute of Developing Economies, vol. 44(1), pages 27-52, March.
    6. Guerineau, Samuel & Guillamont Jeanneney, Sylviane, 2005. "Deflation in China," China Economic Review, Elsevier, vol. 16(4), pages 336-363.
    7. Agnès Bénassy-Quéré & Amina Lahrèche-Révil & Valérie Mignon, 2004. "Le yuan et le G20," Revue d'Économie Financière, Programme National Persée, vol. 77(4), pages 127-146.
    8. repec:kap:iaecre:v:13:y:2007:i:2:p:183-199 is not listed on IDEAS

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