Empirical Analysis of Inflation Spillover Effects among China, Japan, and South Korea

DOI

10.2991/978-94-6463-916-2_31How to use a DOI?

Keywords

Inflation spillover; East Asian economies; VECM; GVAR

Abstract

As the leading economies in East Asia, the existence of inflation spillover effects among China, Japan, and South Korea has become a focal issue in the academic discourse. However, existing studies have yielded inconsistent conclusions, often due to outdated data or the inclusion of additional countries, which complicates the analysis of trilateral dynamics. This paper addresses this gap by employing the most recent monthly macroeconomic data from January 2002 to March 2025 and applies both the Vector Error Correction Model (VECM) and the Global Vector Autoregression (GVAR) framework to empirically examine the presence and extent of inflation spillovers among the three countries. The findings indicate that Chinese inflation exerts a marginal influence on Japan and South Korea, while the reverse effect is negligible. Moreover, China’s real output is found to significantly affect inflation rates in both Japan and South Korea. These results provide valuable insights for inflation forecasting and monetary policy coordination among the three nations. The practical relevance of this study lies in offering policymakers in China, Japan, and South Korea guidance on forecasting inflation and other macroeconomic variables, thereby providing policy implications for the design of monetary strategies.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - He Wang
PY  - 2025
DA  - 2025/12/22
TI  - Empirical Analysis of Inflation Spillover Effects among China, Japan, and South Korea
BT  - Proceedings of the 2025 4th International Conference on Public Service, Economic Management and Sustainable Development (PESD 2025)
PB  - Atlantis Press
SP  - 265
EP  - 275
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-916-2_31
DO  - 10.2991/978-94-6463-916-2_31
ID  - Wang2025
ER  -