Wage and Price Dynamics in a Large Emerging Economy: The Case of China

22 Pages Posted: 12 Apr 2013

See all articles by Carsten A. Holz

Carsten A. Holz

Hong Kong University of Science & Technology (HKUST) - Division of Social Science

Aaron N. Mehrotra

Bank for International Settlements (BIS)

Date Written: April 2013

Abstract

This study finds that the growth in labour costs in China is not passed through fully to final prices in China, neither in the tradable goods sector nor in the economy as a whole. This probably reflects the strong pressure on profit margins from a highly competitive environment, especially in manufactured goods. The potential implications of labour cost increases in China for global inflation pressures are also discussed.

Keywords: Labour costs, inflation, China, global economic slack, globalisation omma separated

JEL Classification: E31, F42, J30

Suggested Citation

Holz, Carsten A. and Mehrotra, Aaron N., Wage and Price Dynamics in a Large Emerging Economy: The Case of China (April 2013). BIS Working Paper No. 409, Available at SSRN: https://ssrn.com/abstract=2247890

Carsten A. Holz (Contact Author)

Hong Kong University of Science & Technology (HKUST) - Division of Social Science ( email )

Division of Social Science
Clear Water Bay
Clear Water Bay, Kowloon
Hong Kong

Aaron N. Mehrotra

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

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