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The Differentiation and Heterogeneous Convergence of China’s Interprovincial Inflation
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TitleThe Differentiation and Heterogeneous Convergence of China’s Interprovincial Inflation  
AuthorZhou Jian,Guo Guang-yuan and Cui Chang  
OrganizationShanghai University of Finance and Economics; 
Key WordsInterprovincial Inflation;Differentiation and Heterogeneous Convergence;spatial-temporal feature;, smooth transition mechanism 
AbstractThere are two typical features in the evolution of inflation at provincial level in China: divergence and convergence, both of which attract plenty of attention from theoretical research and policy making. Usually, these two features are discussed or studied separately, and as we know, so far there has been no literature studied these two features together comprehensively. By the analysis of some stylized facts of China’s interprovincial inflation data, we find that there are both differentiation and heterogeneous convergence among China’s interprovincial inflation. Why both divergence and convergence arise simultaneously? Clearly, studying this question deeply will benefit the whole theoretical research and policy implementation of inflation. We propose a hybrid spatial model with nonlinear smooth transition mechanism to capture these features. Our results are in agreement with that convergence accompanied by divergence is a significant characteristic of China’s provincial inflation. At last, we give a detail analysis on the economic policy sense of this compound movement feature. 
Serial NumberWP1080 
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