Trade Openness and Inflation Rate in China: Empirical Evidence from Time Series Data
Round 1
Reviewer 1 Report
Review of the paper titled „Trade Openness and Inflation Rate in China: Empirical Evidence from Time Series Data” under consideration to the Economies journal:
Major issues:
- Introduction: One could slightly better introduce the importance of trade openness in the economy and its aftermaths. A good review you may find here: http://doi.org/10.2478/bog-2018-0007 and here https://doi.org/10.1515/9788395815041
- You could add a short paragraph with the benefits of using ARDL approach towards previously discussed ones.
- One can think of the limitations of the study, which authors may address at the end of the paper (like omitted variables, and methods deficiency).
Minor issues:
- Unit root tests – please write the name of the specific type of the test authors use.
- You may think of shifting the part with a discussion of findings to a separate section.
Outcome:
The introduction well describes the state of the art and novelty of the paper. The article is strictly focused on the relationship between trade openness and inflation. It is concise. It well describes the relationship between trade openness and inflation in the literature section. The research design is proper, the results are well-described. Given that the changes suggested are minor, I opt for publishing the paper after the implementation of these amendments.
Author Response
Review of the paper titled „Trade Openness and Inflation Rate in China: Empirical Evidence from Time Series Data” under consideration to the Economies journal:
Major issues:
- Introduction: One could slightly better introduce the importance of trade openness in the economy and its aftermaths. A good review you may find here: http://doi.org/10.2478/bog-2018-0007 and here https://doi.org/10.1515/9788395815041
Response: Thank you for your comment. We have improved the introduction by following your comments. Please see the green color changes in the introduction section.
- You could add a short paragraph with the benefits of using ARDL approach towards previously discussed ones.
Response: Thank you for your comment. We have added a short paragraph highlighting the benefits of ARDL in the methodology section. Please see the green color changes.
- One can think of the limitations of the study, which authors may address at the end of the paper (like omitted variables, and methods deficiency).
Response: The limitations of the study are mentioned at the end of the paper. Please see the green color changes in the final section.
Minor issues:
- Unit root tests – please write the name of the specific type of the test authors use.
Response: Thank you for the comment. The name of the unit root test is mentioned in section 4.2 using green color for your kind reference.
- You may think of shifting the part with a discussion of findings to a separate section.
Response: Following your comment, we have placed discussion on long run and short run results in separate section (Section 5).
Outcome:
The introduction well describes the state of the art and novelty of the paper. The article is strictly focused on the relationship between trade openness and inflation. It is concise. It well describes the relationship between trade openness and inflation in the literature section. The research design is proper, the results are well-described. Given that the changes suggested are minor, I opt for publishing the paper after the implementation of these amendments.
Response: Thank you very much.
Reviewer 2 Report
Dear Sir/Madam
Thank you for inviting me to review this paper. After reviewing this, I think that the quality of the paper is well. The objectives are clear. The methodology is well. The paper has some interesting findings, and this paper can be a good example for readers.
I have some comments for the authors to do how to improve this paper.
1/ I think that the novelty should be strongly declared in the introduction. And, some main findings could be also discussed here.
2/ The literature review is the weakeast point in this paper. This should be recently updated and then reaffirmed the novelty of the paper.
3/ The results should have a section: discussion the trade and exchange rate in China from the past to present. This discussion can be transferred a broad view to the readers.
4/ Table 1 indicates CPI (Growth), I think this is the inflation.
5/ Please discuss ECT (-1) coefficient.
Thank you
A minor revision
Author Response
Comments and Suggestions for Authors
Dear Sir/Madam
Thank you for inviting me to review this paper. After reviewing this, I think that the quality of the paper is well. The objectives are clear. The methodology is well. The paper has some interesting findings, and this paper can be a good example for readers.
I have some comments for the authors to do how to improve this paper.
1/ I think that the novelty should be strongly declared in the introduction. And some main findings could be also discussed here.
Response: We have incorporated the suggestions given by using green color text. Please see changes made in green color in the introduction section. The main findings are also discussed in the penultimate paragraph of the introduction.
2/ The literature review is the weakest point in this paper. This should be recently updated and then reaffirmed the novelty of the paper.
Response: Following your comment, we have improved the literature review section. Please see the green color changes in the literature review section.
3/ The results should have a section: discussion the trade and exchange rate in China from the past to present. This discussion can be transferred a broad view to the readers.
Response: In the descriptive section, we have shown the historical trend of both trade and exchange rate. Please see the green color changes.
4/ Table 1 indicates CPI (Growth), I think this is inflation.
Response: Yes, you are right. It is the growth of CPI which is the measure of inflation.
5/ Please discuss ECT (-1) coefficient.
Response: Following your comment, we have discussed the ECT term. Please see the green color changes on page 9.
Thank you
Reviewer 3 Report
Thank you for the opportunity to review this timely article examining the relationship between trade openness and inflation in China. The authors utilize time series data and ARDL modeling to assess whether greater trade openness reduces inflation, finding evidence for "Romer effects" of openness lowering inflation over the long run. While the topic is policy-relevant and the results meaningful, I have some concerns regarding the framing, literature review, and discussion of implications that should be addressed. My specific comments are below:
- The introduction does not make the unique contribution of this study clear compared to existing literature on trade openness and inflation in China. Explicitly state how this study adds to current knowledge.
- Hypotheses are implied but not formally stated in the introduction. Clearly state the study hypotheses early on.
- Provide more details on the sample - time period, data sources, inflation and trade openness measurements etc. to justify the rationale.
- The literature review lacks critical analysis. Compare and contrast findings from previous studies more directly rather than just describing them.
- Do not just list gaps but explain how this study addresses specific gaps - e.g. use of time series data for China during post-reform period.
- Give summary statistics of the variables used to provide more context on the sample.
- Explain why ARDL is an appropriate methodological approach given the study aims and data limitations. Some relevant literature to the ARDL is given below as the article misses recent applications of this model:
https://doi.org/10.3390/w14121832
https://doi.org/10.1016/j.frl.2020.101488
- Acknowledge limitations of using secondary data sources and proxy measurements of inflation and trade openness.
- Interpret the direction and magnitude of effects in results, don't just state them. Elaborate on potential reasons behind the findings.
- Explicitly compare your findings with those from previous literature - do they agree or contradict?
- Discuss specific policy implications stemming from the results - trade, monetary etc.
- Restate the hypotheses and objectives and summarize how the results address them.
- Offer specific policy recommendations related to managing trade openness, inflation, growth etc. based on your findings.
- Suggest future research directions - e.g. effects across industries or provinces, other macroeconomic outcomes, role of trade composition etc.
- The literature review and discussion of findings need significant improvement to highlight contributions to existing knowledge. Expand implications and situate findings in the context of past studies.
Author Response
- The introduction does not make the unique contribution of this study clear compared to existing literature on trade openness and inflation in China. Explicitly state how this study adds to current knowledge.
Response: The comment is incorporated. Please see the green color text in revised version.
- Hypotheses are implied but not formally stated in the introduction. Clearly state the study hypotheses early on.
Response: The comment is incorporated. Please see the green color text in revised version.
- Provide more details on the sample - time period, data sources, inflation and trade openness measurements etc. to justify the rationale.
Response: The comment is incorporated. Please see the green color text in revised version.
- The literature review lacks critical analysis. Compare and contrast findings from previous studies more directly rather than just describing them.
Response: The comment is incorporated. Please see the green color text in revised version.
- Do not just list gaps but explain how this study addresses specific gaps - e.g. use of time series data for China during post-reform period.
Response: The comment is incorporated. Please see the green color text in revised version.
- Give summary statistics of the variables used to provide more context on the sample.
Response: The comment is incorporated. Please see the green color text in revised version.
- Explain why ARDL is an appropriate methodological approach given the study aims and data limitations. Some relevant literature to the ARDL is given below as the article misses recent applications of this model:
Response: The comment is incorporated. Please see the green color text in revised version.
https://doi.org/10.3390/w14121832
https://doi.org/10.1016/j.frl.2020.101488
- Acknowledge limitations of using secondary data sources and proxy measurements of inflation and trade openness.
Response: The comment is incorporated. Please see the green color text in revised version.
- Interpret the direction and magnitude of effects in results, don't just state them. Elaborate on potential reasons behind the findings.
Response: The comment is incorporated. Please see the green color text in revised version.
- Explicitly compare your findings with those from previous literature - do they agree or contradict?
Response: The comment is incorporated. Please see the green color text in revised version.
- Discuss specific policy implications stemming from the results - trade, monetary etc.
Response: The comment is incorporated. Please see the green color text in revised version.
- Restate the hypotheses and objectives and summarize how the results address them.
Response: The comment is incorporated. Please see the green color text in revised version.
- Offer specific policy recommendations related to managing trade openness, inflation, growth etc. based on your findings.
Response: The comment is incorporated. Please see the green color text in revised version.
- Suggest future research directions - e.g. effects across industries or provinces, other macroeconomic outcomes, role of trade composition etc.
Response: The comment is incorporated. Please see the green color text in revised version.
- The literature review and discussion of findings need significant improvement to highlight contributions to existing knowledge. Expand implications and situate findings in the context of past studies.
Response: The comment is incorporated. Please see the green color text in revised version.
Round 2
Reviewer 2 Report
Dear Professor
I agree with this
Thank you
Author Response
Reviewer-2
Comments and Suggestions for Authors
Dear Professor
I agree with this.
Response: Thank you for accepting our paper.
Thank you
Reviewer 3 Report
Thank you for the revised version. However, the paper still needs significant revisions:
1. Please improve the methods part. There are too many equations. Put them in context and explain what is happening in each step.
2. The results, although many, are not synthesized well and not put into perspective, and not linked back to objectives. Also, they lack interpretation.
3. The discussion section, where authors are expected to contexualize the findings and compare the results with previous studies, is missing.
Author Response
Reviewer-3
Comments and Suggestions for Authors
Thank you for the revised version. However, the paper still needs significant revisions:
We have addressed the points you good self has raised. The revised version is much more improved now after your suggestions.
- Please improve the methods part. There are too many equations. Put them in context and explain what is happening in each step.
Response: Thank you for suggestion. We have kept only the main equations, one for the long run (2) and one for the short run (3). The rest of the equations are deleted as they were causing confusion.
- The results, although many, are not synthesized well and not put into perspective, and not linked back to objectives. Also, they lack interpretation.
Response: Results are explained in more detail. Please see the green color changes in the revised version.
- The discussion section, where authors are expected to contexualize the findings and compare the results with previous studies, is missing.
Response: Results are compared with prior literature. Please see the green color changes in the revised version.
Round 3
Reviewer 3 Report
I have no further comments.
