Inflation in China has been remarkably stable during the last decade, a dramatic shift from the pattern seen in the prior two decades, and so questions arise as to whether inflation dynamics has also changed, and if so, what has caused the change and what are the policy implications? This paper...

This paper evaluates the empirical validity of the New Keynesian Phillips Curve (NKPC) model of rational expectations. We employ an instrumental variable (IV) projection method to approximate inflation expectations, and show that the inference based on this approach can differ significantly from...