I wondered whether Chinese inflation behavior was anomalous. Answering that question depends critically on (1) what model you believe in, (2) what you believe the model parameters are, (3) what you think the input values are, and (4) whether you think the model has been stable over time. Here’s one answer. Consider the evolution of CPI inflation in China. {chart} Figure 1: Quarter-on-quarter Chinese CPI inflation (blue), year-on-year (tan), calculated as log differences. ECRI defined recession dates shaded light blue. CPI adjusted using X-13. Source: World Bank. This is the CPI series published by Kose and Ohnsorge ... (full story)