Financialisation of goods in China

Abstract

This paper analyses price fluctuations of common goods in China. There are two types of fluctuation patterns in the underlying prices: the pattern of persistent and modest rises and the pattern of abrupt rises followed by dramatic falls. The analysis reveals that these two fluctuation patterns are related to a growing phenomenon of goods financialisation in China. This paper uses time series data to show that goods financialisation in China is indeed under its way to various levels, which renders different dynamic effects on consumer price inflation. The findings also have implications for making macroeconomic policies.

Keywords:

• Goods financialisation
• financial awareness
• investment
• inflation

Notes

Disclosure statement

The author reports no conflicts of interest. The author alone is responsible for the content and writing of this article.

Notes

1 These goals are stated in the 1977 Amendment to the Federal Reserve Act, the US American Congress (1977).

2 It is laid down in Article 127 (1) of the Treaty on the Functioning of the European Union European Union (2007).

3 Cited from Southwestern University of Finance and Economics: Report of China Household Finance Survey Southwestern University of Finance and Economics (2013).

4 Data source: Chinese Academy of Social Sciences, 2012 Blue Paper of Society Chinese Academy of Social Sciences (2012).