Business School ,Sun Yat-Sen University;Lingnan College, Sun Yat-Sen University; Collaborative Innovation Center for 21st-Century Maritime Silk Road Studies,Guangdong University of Foreign Studies
Abstract:
In this paper, a nonlinear system model with multidimensional states is built from the micro level, and resolved by a nonlinear model predictive control method. It is revealed that there is an obvious positive relationship between monopoly and inflation. The evidence from semiparametric estimation of the varying-coefficient panel data model shows that, monopoly behavior in a low-efficiency industry does have a significant effect on inflation while the effect for a high-efficiency industry is much weaker. The result has a significant implication for China’s macroeconomic control in maintaining the current growth and preventing potential inflation.
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