Wage growth identified as key driver of inflation in China.
The article investigates inflation dynamics in China by analyzing factors that affect inflation. The researchers used data analysis to study how the output gap and wage growth impact inflation. They found that electricity consumption per unit of capital is a better measure of inflation pressure than other alternatives. Wage growth plays a significant role in determining inflation. The study also showed that the money gap causes consumer price inflation in the long run. Overall, the research provides insights into current inflation trends in China and suggests policy implications.