Sheng Liugang | Team Persistent or Team Transitory —— Sectoral Linkages and Inflation Persistence

December 7th,The "2024 International Trade Disputes and Globalization Restructuring Academic Symposium"Successfully held at Lingnan University in Hong Kong."

Associate Professor Sheng Liugang from the Chinese University of Hong Kong attended, followed by Lecturer Chen Xiao from the University of International Business and Economics.HostSub-forum five, "Policy Formulation and Effectiveness Evaluation," andThe topic of sharing isPersistent or Temporary: Sectoral Links and the Persistence of Inflation（Team Persistent or Team Transitory? Sectoral Linkage and Inflation Persistence）The article.

Sheng Liugang is an Associate Professor in the Department of Economics at the Chinese University of Hong Kong. His research areas include international trade and international macroeconomics.And economic development, its research results were published inQuarterly Journal of Economics, Journal of Development Economics, Journal of Applied Econometricsand the Quarterly Journal of EconomicsHe has authored top-tier domestic and international journals such as "Law and Social Sciences" and the book "Changes in Sino-US Economic and Trade Relations".He received his Ph.D. in Economics from the University of California, Davis.

In his presentation, Sheng Liugang pointed out that the US inflation rate has remained high in recent years, making it crucial to study the reasons for this persistent high inflation. By constructing a new FAVAR model and employing the lasso method, empirical evidence shows that inter-sectoral linkages amplify the high persistence of US inflation. The aggregate shock primarily stems from oil prices, while inter-sectoral linkages and spillovers lead to persistent inflation. The model indicates that the "spillover effect" of inter-sectoral linkages leads to persistent inflation, or significantly contributes to its long-term persistence.

Zhang Jialiang, Assistant Professor, Central University of Finance and EconomicsShe provided commentary on the article.The paper states that it makes a significant contribution by adding coefficient multiplication to the Lasso model for high-dimensional data, which is mainly used in machine learning processes. The question remains whether there is an overfitting problem.From the image, it appears that the summation effect can remove the portion related to itself, retaining only the spillover effect. She suggests...Further consideration could be given to the connections with the literature, such as the relationship between macroeconomic and trade theoretical models and theories. Additionally, there may be some confusing relationships in the FAVAR framework across different dimensions.