Competition and regional Phillips curve: Evidence from China.

The product market competition affects the non-neutrality of monetary policy. This paper quantitatively assesses its impact on the slope of the Phillips curve through the channels of nominal and real rigidity. We build a New Keynesian model using the Kimball aggregator and the Calvo staggered pricing scheme. We show that a more competitive market environment has opposite effects on the slope of the Phillips curve by increasing the real rigidity and lowering the nominal rigidity. We then estimated the model using regional data of China. The Bayesian estimation shows that the response of inflation-output trade-off is larger in the region with a high degree of competition. Counterfactual experiments demonstrate that nominal rigidity has a dominant role and accounts for the majority of the difference in the Phillips curve, while the contribution of real rigidity is relatively minor. Our results highlight the key role of nominal rigidity in determining the inflation-output dynamics.

Buddhist culture as a safeguard for the subjective happiness of Chinese residents: mitigating anxiety regarding housing prices, unemployment, and inequality.

Introduction: This study examines whether Buddhist culture in China can safeguard the subjective happiness of residents by mitigating the detrimental impact of adversity. Considering Chinese traditional culture and referencing Baidu Search Index data, we focus on three sources of anxiety that are currently troubling Chinese residents: housing prices, unemployment, and inequality. Methods: We conduct logit regressiontoinvestigate the mitigating impact of Buddhist culture on anxiety. The frequency of droughts and floods that occurred during the Ming and Qing dynasties are employed as instrumental variables for the local density of Buddhist culture to avoid endogeneity problems. Results: Empirical analysis based on microdata shows that Chinese Buddhist culture demonstrates the ability to alleviate the negative effects of housing price pressures, unemployment anxiety, and perceived inequality on subjective well-being. Mechanism analyses reveal that Chinese Buddhist culture plays a role in ameliorating the adverse impacts of housing and unemployment pressures on factors such as job satisfaction, physical health status, social trust, and expectations of future social standing. Moreover, it works to reduce inclinations toward social comparisons, thereby acting as a safeguard for happiness. Heterogeneity analysis shows that this insurance effect is more pronounced among vulnerable groups, including those in rural areas, middle-aged and elderly demographics, individuals with fewer social connections, lower social security coverage, and suboptimal health conditions. Discussion: This study expands the landscape of happiness economics research and provides novel evidence about the correlation between religion and happiness. Psychotherapists may draw on certain aspects of religious philosophy in addressing mental disorders. From a governmental perspective, there is potential to effectively steer religious culture towards fostering social harmony and promoting economic development.