An Empirical Analysis Of Phillips Curve In China

The relationship between inflation and unemployment has been an major issue among economic scholars. The research on the relationship not only enrich our research material about inflation and unemployment in China, but also facilitate our efforts to solve the unemployment and inflation and deflation problems. However, regarding the applicability of western Phillips Curve Theory in China, there are many different opinions among Chinese scholars.This article is trying to probe into applicability of western Phillips Curve Theory in China, investigate the relationship between inflation rate and unemployment rate in China by analyzing Chinese statistic data , and present some suggestions on relevant policies.This article consists of five parts. The foreword illustrates some popular views of relation between inflation and unemployment and present the issues which are about to discuss. The first part mainly introduces the Phillips Curve Theory, including original Phillips curve, modified Phillips curve, Monetarist Phillips curve and New Keynesian Phillips curve. At the end of the first part the deficiencies of Phillips Curve are discussed. The relationship between inflation and unemployment illustrated by Phillips Curve theory reflects the economic reality of western countries, so it can explain the economic phenomena to some extents. There is complementary relationship between all kind of Phillips curve theories despite the difference between them, and it is the complementarity that makes the whole Phillips curve theory system integrated .However, due to the difference of research methods and the applicability between different countries, the Phillips curve theory is unilateral in some aspects.The second part explains the current situation of research on Phillips curve theory in China. The research on relationship between inflation and unemployment plays a important role on macro-economy decision-making, Chinese scholars take many efforts to investigate the applicability of Phillips curve theory in China. There are many relevant articles which include almost every aspects, however ,the production remain incomplete because of huge amount of handicaps in front of Chinese scholars, such as the difference of market mechanism between Chinese and western countries, the quality of statistic data. One of the biggest deficiencies among the research productions in China is that too few Chinese scholars take the effective unemployment rate into consideration.