Infant Mortality and Inflation in China: Based on the Mixed Frequency VAR Analyses.

ABSTRACT

Reducing neonatal mortality is an important goal in the Sustainable Development Goals (SDGs), and with the outbreak of the new crown epidemic and severe global inflation, it is extremely important to explore the relationship between inflation and infant mortality. This paper investigates the causal relationship between inflation and infant mortality using a mixed frequency vector autoregressive model (MF-VAR) without any filtering procedure, along with impulse response analysis and forecast misspecification variance decomposition, and compares it with a low frequency vector autoregressive model (LF-VAR). We find that there is a causal relationship between inflation and infant mortality, specifically, that is inflation increases infant mortality. Moreover, the contribution of CPI to IMR is greater in the forecast error variance decomposition in the MF-VAR model compared to the LF-VAR model, indicating that CPI has stronger explanatory power for IMR in mixed-frequency data. The results of the study have important implications for China and other developing countries in reducing infant mortality and achieving the Sustainable Development Goals (SDGs). Policymakers should focus on inflation as a macroeconomic variable that reduces the potential negative impact of inflation on infant mortality. The results of the analysis further emphasize the importance of price stability in the context of global inflation caused by the outbreak of the coronavirus pandemic outbreak.