TY  - JOUR
AU  - Weinstein,David
AU  - Broda,Christian
TI  - Exporting Deflation? Chinese Exports and Japanese Prices
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13942
PY  - 2008
Y2  - April 2008
UR  - http://www.nber.org/papers/w13942
L1  - http://www.nber.org/papers/w13942.pdf
N1  - Author contact info:
David Weinstein
Columbia University, Department of Economics
420 W. 118th Street
MC 3308
New York, NY  10027
Tel: 212/854-6880
Fax: 212/854-8059
E-Mail: dew35@columbia.edu

Christian Broda
40 W 57th street
Floor 25th
New York, NY 10019
Tel: 917-214-0301
E-Mail: broda@duquesne.com
M1  - published as Christian Broda, David E. Weinstein. "Exporting Deflation? Chinese Exports and Japanese Prices," in Robert C. Feenstra and Shang-Jin Wei, editors, "China's Growing Role in World Trade" University of Chicago Press (2010)

AB  - Between 1992 and 2002, the Japanese Import Price Index registered a decline of almost 9 percent and Japan entered a period of deflation. We show that much of the correlation between import prices and domestic prices was due to formula biases. Had the IPI been computed using a pure Laspeyres index like the CPI, the IPI would have hardly moved at all. A Laspeyres version of the IPI would have risen 1 percentage point per year faster than the official index. Second we show that Chinese prices did not behave differently from the prices of other importers. Although Chinese prices are substantially lower than the prices of other exporters, they do not exhibit a differential trend. However, we estimate that the typical price per unit quality of a Chinese exporter fell by half between 1992 and 2005. Thus the explosive growth in Chinese exports is attributable to growth in the quality of Chinese exports and the increase in new products being exported by China.
ER  -