[Solved] the relationship between inflation and unemployment in China

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[Solved] the relationship between inflation and unemployment in China

This paper revolves around the relationship between inflation and unemployment in China. You are asked to undertake a literature review of work done on the relationship between inflation and unemployment in China. In particular, discuss what work is there on estimating the Phillips Curve and what modelling strategies have been used. Furthermore, explain what amendments, if any, have been made to fit the analysis to the circumstances of China.

Topic: the relationship between inflation and unemployment in China

You presented a draft chapter reviewing the empirical literature. I suggested that you should define the terms presented in the regression results tables to help clarify the models and variables. We then discussed what empirical work you planned to do. I am not clear what data you will collect and analyse and how. I suggest that you think about this. One possibility that we discussed is to compare Phillips Curve relationships for China using the usual inflation-unemployment relationship but then trying alternative measures of economic and labour market capacity to the official unemployment rate. So, you could see if the relationship is different is you use an alternative measure of unemployment (not the Chinese government’s but one produced by other researchers if it exists). You could also try the employment rate instead (the official rate and any alternative estimates that have been produced).

You might find this resource a useful place to start your research on alternative measures of unemployment/employment: https://www.nber.org/digest/oct15/w21460.html

We discussed the proposed topic area. The suggestion was to undertake a literature review of work done on the relationship between inflation and unemployment in China. In particular, what work is there on estimating the Phillips Curve? What modelling strategies have been used? What amendments, if any, have been made to fit the analysis to the circumstances of China? For the next meeting, it was suggested that Liang summarises the approaches taken in the literature and presents a clear proposal for his own research (refine topic and research question, identify range of literature to be reviewed, suggest possible model to answer research question, present suggested empirical framework – e.g. regression model).