Studies on the Relationships of Potential Output,Output Gap and Inflation Rate

Former studies on the relationship of output and inflation rate pay more attention on the output gap and inflation rate,while accept the constraint that potential output holds no impact on inflation rate.Considering period factor,this study decomposes the real GDP into two parts potential output and output gap by the State-Space Kalman-Filter method based on the quarterly data from China,and then constructing quantile regression models which takes the GDP deflator as dependent variable and the ouput gap and differential potential output as independent variables.The empirical results show that,the impact of potential output on inflation keeps not neutral but positive,and the impact from output gap presents different to different rates of inflation.