The moderate interval and asymmetry of the inflation in China —evidence from the NAIRU

This paper uses state space model based on the expectations-augmented Phillips curve to estimate the NAIRU in China, and it also analyzes the moderate interval of inflation and asymmetry through the real unemployment rate gap. The results of the research show that the moderate interval of inflation is about 2.2179%-6.6389% in China. In recent years, the inflation is in the moderate intervals, but the rising trend is obvious. The response of inflation to the real unemployment rate gap has obvious asymmetry. The response of inflation to the negative real unemployment rate gap is stronger than that to the positive gap.